Is Credit Counselig considered to be bankruptcy?

Credit counseling is not bankruptcy. It is considered an effective alternative to bankruptcy. Credit counseling programs are similar to Chapter 13 bankruptcy, only, in the fact that they are a repayment plan. When a consumer files bankruptcy, creditors are often forced to discharge debt and the consumer is no longer held legally liable for the debt. If a client files chapter 13, the creditors are forced to accept the repayment terms that are established. They are also forced to accept the fact that the debtor can repay the debt at a fraction of the dollar amount owed. Credit counseling is a repayment plan that is mutually agreed upon by the creditors and the consumer. As opposed to reducing the amount of debt that is owed by the consumer, the creditors make adjustments in interest rates and penalty fees that enable the consumer to repay the debt at an accelerated pace. Credit counseling is a repayment program that is mutually agreed upon by the creditor and debtor. The program will enable the creditor to recoup all of the funds that were loaned to the debtor. Counseling programs are not forced upon the creditor like bankruptcy and the client still maintains legal liability for repayment of the debt, which limits the effect that it will have on the consumer's credit.