Honestly, bankruptcy won't impact your credit score nearly as negatively as credit counseling and other things. The bankruptcy will be off of your friend's credit in a number of years, I think it's still seven??, while wage garnishments and other things may remain visible longer. The way some banks and lenders see it, if you are having your wages garnished or if you are getting credit counseling for defaulted loans/payments/etc, then there is a good chance you may need to file bankruptcy in the future. Why loan/sell to someone who may turn around and file bankruptcy in the near future and take away any chance of getting your money?
It's hard to say for sure what would be best for your friend without knowing all of the details but, IMO, bankruptcy would be the way to go. Assuming he has no way to take care of his debts otherwise.