Two of the possible places you may end up to try and solve your credit issues are a non-profit credit counselling agency or in a bankruptcy trustee’s office. The one you choose will depend on several different factors, including your specific financial situation and your ultimate goal regarding your debt.
What They Do
A non-profit credit counselling agency is designed to help you solve your debt problems, through whatever means is best for you. A counsellor will usually sit with you, go over your situation and then help you find the best possible solution. This may include any number of repayment options, budget planning and other suggestions to get your debts paid off and get you back on track financially.
A bankruptcy trustee has a couple of primary duties when it comes to your situation. A trustee is basically in charge of overseeing the bankruptcy process so that both the debtor and creditor’s rights are respected throughout. In some cases, a bankruptcy trustee may provide financial advice designed to try and help avoid bankruptcy. In some cases, trustees are narrowly focused on the solution to your financial problem and don’t always explore all your options. The danger is that they will focus only on solutions that are tailored to suit the creditor’s needs.
The Main Differences
The primary difference between a non-profit credit counselling agency and a bankruptcy trustee is that one deals primarily in bankruptcy and one does not.
Essentially, credit counselling is designed to help people reduce debt and live debt free. A bankruptcy trustee typically deals with cases where bankruptcy has already been filed, or is the only real option.
Some people feel that a bankruptcy trustee doesn’t always have the best interest of the client at heart, because in many cases his fees are based on recovering assets through the bankruptcy process. A non-profit credit counselling agency is more concerned with finding the solution that will enable you to pay down your debts and avoid filing for bankruptcy.
Making the Choice
Deciding what to do when you are in financial difficulty is never easy. Obviously, if you feel that bankruptcy is the best or only choice for your situation, then a bankruptcy trustee is probably the way to go.
However, if you are like most people and cringe at the thought of filing for bankruptcy, it is worth your while to give credit counselling a try. Credit counselling will usually leave you with a higher credit rating than bankruptcy, and you can always opt for bankruptcy if you don’t like what you hear.
Many times, people are under the impression or have been told that their situation is too far gone for anything but bankruptcy, but that isn’t really the case. Try to keep in mind that a bankruptcy trustee benefits if you file for bankruptcy. Take the time to speak to a credit counsellor and explore a different option to possibly avoid making a decision you’ll regret.
