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is based on examining all of the facts. Furthermore, the counselor ensures the protection of rights by all parties involved.

It is as close to a win/win situation as circumstances might allow!

For starters, the service is usually free to the public. The counseling received to assess one's financial circumstances is an objective opinion.

Drawing up a plan of payment requires only:

A sincere desire to pay
A source of income with which to make payment
The organizational skills to follow through

Whatever the protocol used for bankruptcy, the protocol for Credit Counseling is much more user-friendly. Upon setting up a plan of payment, one merely sends payment to the office for the duration of time it takes to pay.

Bankruptcy procedure requires that a fee be paid up front. That money gets paid prior to the rest of the paperwork being completed.

For as long as it takes to complete a bankruptcy, one's entire life seems on hold.
Taxes are disrupted until at least 2-3 years after the date of discharge
To incur further debt is forbidden until the bankruptcy has been officially discharged
To acquire or to dispose of any assets is closely examined for the purpose of restitution to creditors
Even assets already owned are at risk in bankruptcy
Should a debtor attempt to do "right" by one creditor, any side deals could be seen as giving preferential treatment and re-open the entire process to force payment to all of the creditors
Until the bankruptcy process has been completed and discharged for 7 years (length of time required to remove from Credit Bureau), nothing seems private

From my own experience Credit Counseling was a much softer process. When everything is said and done, it all boils down to Who loves you best?

Picture yourself as: The guy who loaned you money and got paid.
Now. Picture yourself as: The guy who loaned you money and got served bankruptcy papers.

If you had to be the one taking losses, which would you rather be?

Learn more about this author, Deborah Murphy.
Click here to send this author comments or questions.

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