what is debt consolidation?

[Lisa@Lunch]

hi, i keep hearing about debt consolidation on TV but I really don't know what it is. Can someone please explain this?

I have over 20,000 in debt that has gone to collections as a result of an injury that put me out of work for almost a year. All three of my credit cards have been maxed and unpaid since. On top of that I never paid off an old truck but they never reposessed it...does it still go on my credit? with the credit card debt alone I can't get a bank account or another credit card, not even a secured card! Now that I'm working again I want to reverse the damage. i used to have good credit and i want it back!

So the question is--can debt consolidation help me or is it just a scam? usually there's a catch whenever theres a good deal to be had, and i want to know what it is, or if theres any reason i should just forget about it. are their any other ways to get out of debt and fix your credit? not looking for a fast or easy fix, just the most effective. any comments or questions are welcome.

[Cathy]

If you ask me, Lisa, i would stay away from debt consolidation. It's unfortunate that you were hurt and it had a negative effect on your credit. I'm sure that happens often. But don't make your problems worse by paying a bunch of con artists to pay your bills for you. And that's what debt consolidation is. From what I understand, all they do is charge you a big fee to make your paymenst for you, and since the payments are so small (it's costly to pay everyone includng the debt consolidation service every month) all you ever end up paying off is interest fee and other surcharges and late fees. It's not worth it. You should save up all your money and try to pay each debt off in full. It is the best way from what I've come to learn.

If you do get debt consolidation, maybe you should try to get a consolidation loan to pay everything off at once. That way you only have one payment to make and it's much easier on you. But I'm no expert an that's completley up to you. Good luck and don't give up.