Debt consolidation programs can work but it requires research to determine what the programs offer. The best ones offer, which should be included and not a separate fee, counseling or personal finance advice particularly how to establish and maintain a budget. The biggest thing to remember is that for debt consolidation to work a person has to stop using the credit cards or incurring more debt.

There are three distinct things at work here.

One is consolidation. That means getting a new loan to pay off all the other loans. The hope is that the new loan will have a lower interest rate than the old ones. You can consolidate your debts at any bank. Just walk in and tell them you want to apply for a debt consolidation loan. They MIGHT give it to you, if you’re a decent credit risk.

The second is debt/credit counseling. This is where a counselor will actually teach you and help you to get out of debt and possibly assist with the consolidation. Or they might contact your creditors for you and try to establish payment plans to avoid defaults.

The third, credit consolidation, is the tricky one, because it’s hard to distinguish between the honest ones and the crooks. Some of these outfits will tell you to stop paying your bills to make it look like you are completely broke and hopeless, with the goal being to have your creditors reduce the amount of money you owe them. Then you would give this outfit some money, and they would keep some, and give the rest to the creditors. Not paying your bills will destroy your credit and these places will rip you off.

The best idea is to start paying down your debts with all available money you have.