Here's part 7 of a series on ideas for consolidating debt from Market Watch. The ideas are from Greg Pahl, co-author of "The Unofficial Guide to Beating Debt," and Virginia Morris, co-author of "The Wall Street Journal Guide to Understanding Money & Investing." Here's their next suggestion:
A nonprofit consumer credit counseling agency. Morris says this actually should be your first stop. Experts in helping consumers get out of debt, they work with creditors regularly to get late fees waived and interest rates reduced. "They've heard it all. Nothing you will tell them will shock them," Morris says. "What they often will do is, rather than consolidating debt, you pay them a fixed amount and they pay it out to your creditors. It's a kind of discipline that can be helpful. It's enforcing a change in spending habits. For the person who is serious about getting out of debt, that's a solution."
Just be sure you use a reputable service. Call your bank and ask for companies they've worked with in the past. Ask for references from the agency and call the people they give you. I've heard of many scams in this field, so be sure to do your research.
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