Debt Consolidation For

Is debt consolidation a good thing to do over bankruptcy?

A friend of mine is considering doing debt consolidation and I’ve heard that these types of businesses may be crooked. Can someone give me their honest opinion on if it is a good choice for someone with an extremely bad credit rating.

Debt consolidation is used for several different things:

1. Big loan to pay off debts — bad idea to shift debt to new loan unless you are disciplined enough to not run the credit cards back up.

2. Settle debt for less than full balance. They hold your payments till all your accounts are 90 days past due. Then offer lowball settlements. Not only will this trash your credit, but many credit card companies won’t play. They just sue.

3. Credit counseling/debt management program. Check here: http://www.nfcc.org/. These are legit, non-profit companies. They can review all you finances and advise how to proceed. They have debt management programs available if you qualify, for a nominal fee. They negotiate lower interest rates, not settlements.

DEBT CONSOLIDATION AND DEBT MANAGEMENT FOR BAD CREDIT