The most crucial thing you must do if you are under a seemingly insurmountable mountain of debt is to stop using credit. Destroy your credit cards and vow not to take on more debt until you have solved the problems you have right now. Settle what you can and then move on to the next option: debt consolidation.
Debt consolidation is an umbrella term, meaning there are a few different ways it can be done. Do some exploring to find the right option for your circumstances. For those who have equity in a home, a low interest loan based on that equity could be the answer.
If you do not have home equity, some debt consolidation companies may still be able to help you. Find a service that offers to talk to your creditors about lowering interest rates and settling some debt with less than you do owe. They will then combine the rest of your debt and charge you one payment a month with an additional fee for their service. Sometimes they do this through an unsecured loan. Other times, they take your one payment and pay each of your creditors for you.
As with any other business, there are good and bad consolidation companies. Read consumer reviews and look into backgrounds before choosing a consolidation company. Find out what the company offers upfront. Ask them about their services and get a detailed list of fees for these services. One of the most important services a debt consolidation company can offer is credit counseling. This service can provide you with the tools you need to become debt free and stay that way.
Never consider bankruptcy until you have at least looked into debt consolidation. If you go through a quality company, you will be glad you chose to consolidate.
