Debt Consolidation | Yakezie Reader Insights | Yakezie Forums

Debt consolidation can be good, you just have to work with someone trusted and do it the right way. When I worked in banking, I helped people build customized consolidation packages around a new home mortgage to lower monthly payments and interest rates, but the catch was that it was secured.

I know a lot of people that have went this route. Some of them never changed their spending, so the problem just came back. Others, used it as a chance to get a fresh start (once they paid everything off, of course).

I almost did it about 10 or 12 years ago, but I didn't like how they were trying to rip me off: http://fatguyskinnywallet.com/…..ce-for-me/

As has been said, the only, only, only reason to consider debt consolidation would be if someone committed to shredding the credit cards and had truly changed their spending habits.  Otherwise it is debt multiplication instead of consolidation.

That said, if they had made the commitment, the due diligence for the proper non-profit debt con. company is well worth it. 

Danielle, the attorney who blogs at Kitten a go go, and was the Frugal Lawyer,  tells her story about Debt Con. at http://www.kittenagogo.com/my-…..oney-story

As others have mentioned, to get out of debt one has to change their values, thinking, emotional responses and behaviour. This is a long and painful process precipitated by crisis – this is how it went with me. Consolidating aleviates the crisis and lifts off the pressure to examine and change all that I mentioned before.

There is also the element of 'chunking' – it is easier to deal with things when they are chunked down or made smaller. Consolidating makes the matter so much bigger – it is chunking up; as a consequence loss of motivation is to be expected. There is no 'boost' when you pay one debt off.

Consolidating is generally a very bad idea.

Maria

A friend used debt consolidation, and continued her poor spending habits. It's not a bandaid, it just simplifies finances a bit. I would only ever do debt consolidation if I were completely serious about changing my financial situation – most people that do it aren't serious about it, and remain and multiply their debt.