If you are in debt and you are tired of all the harassing calls and mail you receive from various creditors... If you are totally confused as to whom you should pay and how much… If you have too many credit cards and have no idea of how much you owe… Then you need debt consolidation.



In today’s economy, it is very easy to get into serious debt, but it is very hard to get out of it, at least on your own; and that’s where debt consolidation comes in.

But what exactly is debt consolidation?

Put in simple terms: Debt consolidation is a debt reduction system that enables consumers to combine their various unsecured debts into a single payment. Rather than sending out payments on six or seven bank and store credit cards, one could easily make one payment to the debt consolidation company and that company would then send the funds on your behalf.

This system of money management can be very beneficial to the consumer, as the debt consolidation company usually negotiates a lower interest rate and reduced balance, a lower monthly payment as well as eliminates late fees. The best part must be when they give you a set time period to pay off the debt.

Car loans as well as mortgage loans are not subject to consolidation as they are secured. Unsecured loans like bank credit cards affiliated with Visa and MasterCard and various department store credit cards are the typical items one will put in a debt consolidation program.

So is debt consolidation preferable to bankruptcy?

Creditors look at debt consolidation more favorably than than they do at bankruptcy. This is because debt consolidation displays the consumer's willingness to put in a strong, good faith effort to take responsibility and pay off his debts. This is in stark contrast to bankruptcy where debtors select to erase debt or pay little back, leaving creditors with very little from the debtor.

Although bankruptcy allows consumers to eliminate their debt and start afresh, it also destroys the consumers’ credit background.

With the help offered by debt consolidation, a consumer can reduce his debt considerably, combine multiple payments into one, and preserve their credit background while avoiding bankruptcy.

There are various ways and means of going about debt consolidation, including contacting debt consolidation companies and applying for debt consolidation loans. There are also many companies listed on the Internet that are willing to help consumers start the debt elimination process.