Credit counseling or debt settlement can be a better choice than Bankruptcy if you can afford to pay some, but not all, of your debt. Unless your debts are so overwhelming that you cannot ever imagine being able to repay them, you should not file bankruptcy.
Depending on the size of your income. I feel that you should have at least $25,000 in debt to consider bankruptcy. The more debt you have, the more bankruptcy is the right choice. The less debt you have, the more credit counseling or debt settlement can help you. Remember, you're only eligible to file a Chapter 7 bankruptcy once every 8 years. Credit counseling and debt settlement, though, are always available as a way to resolve your debts. But all three, bankruptcy, credit counseling and debt settlement all damage your credit score - and can limit your ability to get credit in the future.
Depending on the exemptions available to you in Bankruptcy, which vary widely from state to state, credit counseling or debt settlement could allow you to keep property that you might otherwise forfeit if you filed Bankruptcy.
There is a lot to consider, so make sure you obtain legal advice from someone experienced with both bankruptcy and debt settlement programs before you make a final decision.