Credit Advantages

• One of the biggest advantages to using a debt management plan through a credit counseling company is avoiding bankruptcy. Bankruptcy can seriously hamper credit for 7 to 10 years.
  
  

Credit Disadvantages

• The fact that you have used credit counseling usually stays on a credit report for up to 7 years, and some lenders consider it a negative credit event. Credit cards being managed by the credit counseling company will also show up as closed by credit grantor.
  
  

Financial Advantages

• Many credit counselors can help debtors save money by getting late fees waived, interest rates lowered, and in some cases even the balance reduced.
  
  

Financial Disadvantages

• The monthly fees could exceed $20 per month, which might be more helpful toward debt repayment. This especially applies in smaller debt cases.
  
  

General Advantages

• Credit counseling companies can often get creditors to work with them on repayment alternatives more effectively than consumers can do with their own resources.