There are many companies that will offer debt consolidation services; however, as a smart consumer, you must check that the company is in fact contacting your creditors and properly filing your consolidated bills.

Perhaps the most favorable option for consumers that have found themselves in trouble of not making their bills is to perform a debt settlement. This can be very beneficial for individuals who can afford this option, because more often than not, a lender will allow for the lendee to settle his/her debt at a lower price than is currently owed.

Resources:

Yetipp.com – Debt Consolidation Help for Everyone

Debt negotiation is when the consumer’s lenders are contacted and asked to lower the total amount owed. Buyer beware, because many consumers have been taken advantage of by companies who offer this service. Many cases have been documented where the consumer’s debt negotiation company simply took the money and never contacted the lenders; causing the debtor to fall into even worse standing with their lenders.

Debt elimination offers are often schemes used to convince the consumer that their current lines of credit are in fact illegal agreements. A debt elimination company will often charge an upfront fee to supply a legal document to the lender which supposedly absolves the consumer of the monies owed. This service is basically a waste of time and money, as the documentation has no bearing on the debt owed.

Resources:

Intermex Power – BBB on Differences Between Debt Consolidation, Debt Negotiation, and Debt Elimination Plans