The pros are it ties all your debt into one big ball.
The cons are the one big ball also has interest added on top of the interest you are already paying which won't necessarily make it any more manageableit is as bad or worse than bankruptcy, it will ruin your credit for a long time, lenders usually won't touch people with debt consolidation, you will not be able to get credit while you are in consolidationNot all are bad, only the ones that charge.
I use Payplan, and have done for a few years. My debt problem was astronomical (still is a bit), but they do not charge, deal with creditors and more importantly the creditors trust them. 100% of your money goes to pay off debts, they can help get the interest frozen, and regularly review your circumstances with you.
Most important thing is do not "hide" from the problem, deal with it.

Payplan are fully funded by the banks, not by consumers.None of the above are correct… I used a debt consolidation company and yes it will hurt your credit at first, but won't ruin it like bankruptcy. I had about 35K of debt, and was barely making minimum payments.

I tried to get my "lenders" to reduce my APR, but they all declined because I only made minimum payments. So, I used a consolidation company. They were able to reduce my rates to under 9% on ALL of them. I was able to pay off all my debt in about 4 years. I recently bought a new car, and they asked me about it..

I explained I was young, and dumb and let my credit get out of control. They said, no problem and I financed my car at 4.9% for 5 years. I also bought a new home while I was in the debt consolidation program. As I said, it might hurt you at first, but won't kill you.

I now have a 740 credit score and I'm slowly building my way up… the smart way this time! Good luckIt does affect your credit rating, but if things are that bad, I don't suppose you'll be too worried about that. It can give you a bit of breathing space, you learn to budget around things, and you do learn not to be as stupid again!! I did it about 9 years ago & I've managed to get credit again, so the credit rating thing isn't forever! Good luck with it xxThey help you make manageable monthly payments but your debts dont go away. Also companies charge you fees unlike the Consumer Credit Counselling Service. Before you consider this why not see if you can get any credit card or personal loan debts legally wiped out then you would owe a lot less. I used www.bdebtfree.info and I was very pleased with the result.I used one and it made my life and debt worse… They told me just to pay them a sum each month and they would sort it all out. What they didnt tell me was that 3 companies has refused the offer of payment from them (as it was £3.50) and they still insisted on chasing me and trying to get money. The debt company told me not to make personal commitments to anyone as my other creditors would see this on my file so after a year of getting nowhere I cancelled the plan and contacted the companies myself. I owe approx £12000 and I pay each creditor a small payment each month and also save up extras and when I have enough to pay off the smallest amount I do this then work my way up the list from least owed to most owed. Hope this helps! xxReputable credit counseling organizations advise you on managing your money and debts, help you develop a budget, and usually offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.

A reputable credit counseling agency should send you free information about itself and the services it provides without requiring you to provide any details about your situation. If a firm doesn't do that, consider it a red flag and go elsewhere for help.

Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But beware — just because an organization says it is “nonprofit” doesn’t guarantee that its services are free or affordable, or that its services are legitimate. In fact, some credit counseling organizations charge high fees, some of which may be hidden, or urge consumers to make “voluntary” contributions that cause them to fall deeper into debt.It's different for every agency, and it's different depending on your location. Make sure you get a TASC member center, which is the Association of Settlement Companies. There are a list of free reviews at http://www.getdebthelp.info. Good luck to you!

 

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