These kinds of programs usually start with an advisor who helps those in trouble by consolidating their debts into one loan. They end up with one payment; a reduced interest rate and in most cases they negotiate to waive the penalties as well as the late fees. If you select the right debt consolidation credit counseling company, they can help you in many ways. The advisors will set you up with a plan with which you can be free from debt.

After examining your financial situation, the advisors will also provide you with a time frame in which your debt problem will be solved. That time frame is usually based on the amount of debt you have, your current budget and how far your creditors are willing to negotiate. As you can see, debt consolidation credit counseling has lots of benefits. But you must also keep in mind that these programs are not suitable for everybody.

Some of the creditors may not be willing to negotiate at that particular time. Others might reject the first offer presented to them by the consolidator. For example, if they consider the time frame to be too long then the credit companies might to just send the account to a debt collector. It’s crazy but no one said this business was based on common sense. Certain credit card companies still have a negative take on credit counseling. So you need to be careful about these things before you decide to go for a counselor.

So you need to learn about these rules prior to enrolling in a debt consolidation credit counseling program. To find out the best company you need to compare the various companies that offer credit counseling and debt consolidation. Choose the one that is the best suited for the situation you are in.

How is debt consolidation a better choice than bankruptcy? First and foremost, you avoid filing endless mounds of paperwork required by the court trustee and attorneys. Secondly, the new bankruptcy laws made filing BK and expensive proposition. On average, you will shell out around $3500.00 in attorney’s fees, plus the cost of filing, plus the cost of the mandatory financial classes. The new laws literally force the majority of people to file Chapter 13, commonly referred to as the repayment plan. Once on this plan, there is virtually no room for error, accident or mishap. Based on THEIR calculations, you are left with very little money to live on.

On the other hand, with debt consolidation, after the accounts are settled as agreed, you walk away with a clean credit report. In addition, most creditors will gladly renew the accounts once the debt is paid off.
Debt consolidation also affords you the ability to reduce the debt amount by forty to seventy percent. That’s a significant savings to say the least. Unlike bankruptcy, in which court tells you how much you can afford, with debt consolidation, you pretty much have control.