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Debt consolidation services are a viable option to bankruptcy and have helped many people become debt-free. These companies will negotiate with creditors for you and devise a plan which will allow all debt to be paid off within 4-6 years.

What Do I Need When I Call?

*Personal Information~

Name, address, phone number

Social security number

*Creditor's Information~

Names, addresses, and phone numbers

Interest rates

Current balances

Minimum monthly payments

*Financial Information~

Income, gross and net

Expenses (mortgage, utilities, food, gas, child care, clothing, entertainment, misc., etc.)

A debt relief counselor will use the information that you provide to develop a workable budget. The counselor will provide suggestions, such as cutting down on entertainment or clothing. The cuts that are made in the budget will allow you to live without monthly dependence on credit cards. The budget will not include monthly credit card payments, instead it'll be one flat monthly payment. The payment will be paid to the debt consolidation service and divided up between all creditors.

If an agreement is reached, in regards to the budget, negotiations will begin with the creditors. The counselor will contact all creditors to negotiate lower interest rates, ask for removal of late and overlimit fees, etc. The agency, typically, has a good working relationship with many of the creditors already, which makes the negotiation phase faster and smoother. Any collection efforts, including phone calls to you by creditors will stop, at this point.

Once a plan is in place, the monthly payment will be dispersed to creditors accordingly. While, the idea of one larger payment instead of many smaller ones may seem intimidating, it'll allow your debt to be paid off in just a few years. If minimum monthly payments are made on credit cards, it can take 25-30 years to have them paid off.

Of course, the key is to avoid additional debt and remain within your budget.

In a nutshell, by a thoroughly researching and then comparing several debt consolidation services, borrowers will be able to qualify and determine the agency that meet your specific financial situation, plus the cheaper interest rate the market is offering. However, it's recommendable working with a seasoned and reputable debt counselor before even make any decision, this is the way you save time because of specialized advise and money by obtaining the best results in a reduced span of time.

Hector Milla is editor of the Reputable Debt Consolidation Companies website – where you can see his best rated debt consolidator service recommendation.

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Tags: Debt, debt consolidation, debt relief, debts