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Step 1
The decision to consolidate your debt may free you up from paying so many bills to so many creditors. It is best if you can work with a program that will limit your debt so that you will be working with just one creditor.
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Step 2
A debt counselor will contact your creditors and work with them to create a systematic pay program that will work for you and them. He may also take the approach that it is better to consolidate into one jumbo debt for ease and convenience, The debt counselor will charge you a fee, but a fee that is well worth while to ease your burden.
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Step 3
Another way to consolidate debt is by taking a single loan that will pay off all of your existing debt. By using this method you may be lowering interest rates by trading many small loans with high rates for one larger loan with a much lower interest rate. Debt consolidation can be going from one unsecured loan to going to another unsecured loan. You may also decide or have no choice to go from one secured loan to another secured loan using one of your assets as collateral.
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Step 4
You may choose to consolidate your debt by a method that works but can be most difficult, self discipline. By contacting your creditors on your own you may be able to work out agreements with your creditors in which they will lessen your monthly burden, but take heed do not look at this as a opportunity to go out and spend more.
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Step 5
Whichever method you use to consolidate your debt, take your time and choose wisely. The company you choose should be recommended by the better business bureau, they should be a company that is recognized in the community for good service and ethical business practices. It is essential that before you choose debt consolidation you do your homework and decide which is the right path for you to take. The wrong decision can put you in a worse situation than you were in when you started.
