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Should I Use a Credit-Counseling Service??? 

When you use a credit-counseling service to structure a debt-management plan, the accounts included in that plan are usually noted on your credit report as "not being paid as agreed." These creditors may also report that the payments are being received through a credit-counseling service.

Credit-counseling services make the point that being in a debt-management plan shows that you're dedicated to repaying your debts, and that can be considered positive when creditors review your report. While that's true, it will be an uphill battle to qualify for new credit until you get a couple of years of solid repayment history on your credit report.  In fact, most lenders view credit counseling as the inability to manage your own finances.

In general, credit-counseling agencies expect you to not take on new revolving credit while in a debt-management plan. Most plans are scheduled to last from three to five years. While you are in the plan your existing revolving credit accounts will be suspended or closed to new charges.

Credit-counseling services help consumers by negotiating with your creditors to agree on a repayment plan, and they may be able to reduce the interest rate on your outstanding balances for accounts in the plan.

In the end, you'll have a lot of the same credit problems that someone that filed for bankruptcy goes through. The differences between a debt-management plan and a Chapter 13 bankruptcy repayment plan aren't as big as you might think, so keep that option in your back pocket as you discuss your debt problems with a credit counselor.