More and more consumers are seeking help with their finances, and one of the first methods they come across is debt consolidation counseling. It has traditionally been at the front of consumer credit services, and remains there today. Whether it's principle is still valid for every consumer is debatable.

Debt consolidation counseling can be very beneficial to those who have amassed some credit card debt, but debt that is still within reach of paying off. For instance, if a person is falling behind on a balance that is relatively small, it may be possible to pay it off with a consolidation loan that is unsecured. While the monthly payments will be much smaller than on the original debt, the interest rate may be high over the long therm. In the case of much larger debt with a number of creditors, most debt consolidation counseling will ultimately lead toward a secured loan.

Secured loans require collateral, and that means using property or any other valuable assets as security. For most, this comes in the form a a second mortgage or home equity loan. The pay off for these loans is lengthy, and while the interest rates appear low, they actually are quite high if the number of years is considered.

There are cases where debt consolidation works, and it can be a great solution, but every consumer has a different financial situation, and debt consolidation counseling often omits other programs, which might be better. Plans such as debt settlement and debt management are also choices, and neither of them involve obtaining loans.

In both cases, the consumer's balances with credit card companies are renegotiated by companies, who specialize in debt resolution. An insured account is set up for the client, and a monthly payment is made to it. When ample funds have amassed, the negotiators go to work with the creditors. Because of federal incentives to creditors, they are becoming very flexible in these negotiations. Many consumers will see as much as 50% reduced from what they originally owed. In this type of program, a person can be debt free in from 12-48 months, depending on size of debt and the amount paid in monthly.

Debt consolidation counseling is but one solution for confronting and dealing with debt. The consumer, who is seeking help, is wise to learn about each and every method that exists before signing up for a plan. Afterall, it can be a long term arrangement and can effect one's financial life for a number of years.