What do u look for in a debt consolidation company?

What r the pros and cons of debt consolidation? Who should do it?

What do u look for in a debt consolidation company?
A debt consolidation company or consumer credit counselor should be able to get you on a budget so both of you understand how your income and debt compares. They should then negotiate a payment plan with your creditors that fits within your budget. And they should be able to negotiate lower interest rates and stop late fees.





The person who should do it is someone who realizes their income is insufficient to pay their essential expenses and debt.





So the pros are you will be able to pay off your debt and have the peace of mind that goes with that. A big downside is that credit counseling appears on your credit record as a bankruptcy for a number of years.





Que Dios le bendiga! (May the Lord bless you!)
Reply:Debt consolidation is useful for people who have encountered a temporary shortfall and are trying to get back on their feet. If you've recently gotten a job after a period of unemployment, or if you have medical bills for a condition that no longer requires treatment, debt consolidation can make sense. But here are some things to consider:





The debt consolidation loan should be at a lower interest rate than your other debts, otherwise it costs you more money than you're spending now.





The debt consolidation loan should NOT be secured by your home or other property, otherwise you're exchanging unsecured debt, for which they can't take your property, for secured debt, for which they CAN take your property.





Debt consolidation should only be done when you reasonably expect that you will have enough money to make payments and not use your credit cards anymore. Too many people take out a debt consolidation loan to pay off their maxed-out credit cards, then they keep using their credit cards and end up with twice as much debt as before. If you can't stop using your cards, DON'T do a consolidation loan.