Debt Consolidation

Hi Terry,

I have about $33,000 in credit card debt. I work in sales and usually make pretty good quarterly commissions, but have not made much extra over the last year and a half and also bought a condo 4 months ago. I am wondering about debt consolidation. Good idea? Bad idea? I talked with someone from one of the more reputable companies and they informed me that I can get my debt cut in half, but they will need to close all of my accounts with a balance. I am afraid this will negatively impact my credit to a point that it is not a good idea for me to go this route. What would you recommend?

Thanks!

Terry Says:  This is a terrible idea!  They can’t “close your accounts” while you have a balance; that’s the first thing that doesn’t make sense.  But typically they do tell you to stop paying, give them some money to “make an offer” (and that means you need to come up with cash to make the offer which could take a while — and a lot of money because they take their fees out of this!) — and meanwhile your credit is destroyed and your creditors can garnish your wages and put a lien on your property!   Call the National Foundation for Credit Counseling and get some real, personalized advice:  800-388-2227.