If you are in over your head in unsecured debt such as credit cards and even medical bills, you may want to try using a debt consolidation program. These programs are not loans, but they can help you get your monthly payments reduced and roll your debt into one easy monthly payment. This helps you avoid having a ton of bills scattered all through the month without the ability to pay them. It also helps you avoid bankruptcy and can rebuild your credit within a couple of years.

When you choose a debt consolidation program, you are avoiding the damage that bankruptcy can do to your credit. When you file bankruptcy, your debts may be wiped out, but you also have the bankruptcy recorded on your credit report. This means that for several years you will have significant difficulty with getting any new loans, buying a house, or starting to rebuild your credit in any way. Banks consider you a risk and will treat you as such for 7-10 years, which is how long a bankruptcy will stay on your credit report. Your life is in a standstill, all because you chose to file bankruptcy. This should always be a last resort.

In contrast, let's look at a debt consolidation program. Let's say that you have several different credit cards, with different limits, interest rates, minimum payments and due dates. With a debt consolidation program, all of this will be eliminated. You meet with a counselor either in person or on the phone, and you give them all your account information. The counselor then contacts each credit card company and works out new terms for you. Many times they work directly for the credit card companies themselves, and will be able to get the credit cards to reduce or freeze all interest, as well lower the principal amount that you owe. Sometimes they can even arrange to get late fees reduced or waived.

Once the counselor works out a deal with each individual company, they will set up a payment plan for you. You will have to pay them a percentage, which is usually calculated in your monthly payment. You now will be paying the debt consolidation program one large payment every month, which will take care of all your debt. The credit card companies receive your payments from them.

When you use a debt consolidation program, you are no longer in danger of bankruptcy. The process is not immediate, and it will usually take a minimum of two years to get your debt paid off. This saves you thousands of dollars in interest over the entire period. Even though you are paying the program for their help, it is still much less than what you would pay in interest and fees if you tried to do this yourself. You can usually negotiate how the credit card companies will report this to the credit agencies as well. While many times they may report the balance as settled instead of paid as agreed, it still looks much better than a default or charge off on your report.

It is important to choose the right debt consolidation program for your needs. Talk to others and get recommendations. There are also many helpful websites out there to get you to choose the right program for you. Take your finances in your own hands and get help today. For more insights and additional information about a Debt Consolidation Program as well as getting an online quote from popular debt consolidation services, please visit our web site at http://www.debtconsolidationstrategies.com