Bad credit and deeply in debt? There's no need to pay a firm, corporation or lawyer to consolidate your debt. Nobody knows your circumstance better than you do; so save the fee and help yourself. In order to do this you need a few basic facts.

Debt consolidation is big business. The consultant you choose isn't interested in your plight. He doesn't care about repairing your credit, condensing your bills into one low monthly payment or whether the service he provides will elevate your standard of living. He wants a client that he can obtain a monthly fee from, for as many years as it may take you to pay your debts. Which if you employ his method, as he hopes; will take you a decade at least. I learned the hard way, unfortunately.

The fact of the matter is this: Debt consultants and consolidators have no special relationship with creditors; therefore you are paying for a go-between. If saving money and reducing debt is your goal, then hiring a consultant is defeating your purpose. Your payments won't be reduced significantly enough to warrant his services Even if he does manage to negotiate lower payments and/or interest rates (unlikely); the monthly fee you're being charged will eat up that minuscule financial relief and you'll be right back where you started.

No doubt you've had problems making payments on time with your creditors. Credit card late fees are enormous and continue to raise your debt even higher. If the late fee puts your card over your spending limit; you will be charged yet another fee on top of the late charge. In effect, this merry-go-round is adding another $60.00 minimum to your debt every month. Times this figure by the number of cards you hold and the picture becomes even more bleak. Something has to change. Either you have to start making payments on time, or you have to re-negotiate due dates. Lowering your payments may be appealing when you have cash flow problems, but this tactic only prolongs your suffering.

Instead, sit down with your statements in front of you and do some math. Most cards have an interest rate between 18 and 28%; especially if the institution that issued your card specializes in high risk lending. If you make the minimum payment due, it will take you about 11 years to pay the debt on a card with a $2000.00 limit that is maxed out.
Basically, you are paying for the items you purchased with that card over and over again. Notice the due dates on each credit card. Compare the due dates with your pay schedule. If you get paid monthly on the first; an ideal due date would be the 10th. This allows time to cash your paycheck, and make your payment on time. No more late fees and over limit charges. In other words, coordinate your pay dates and due dates so you can be successful in paying in a timely, less stressful manner.

Contrary to popular belief, creditors are more than willing to work out a payment schedule with you-regardless of your pre-designated due date. Communication is imperative. Simply call your lender, explain (without rambling) in a matter of fact, friendly tone that you need to reassign your monthly due date in order to pay your debt on time. You will be amazed how quickly and easily this can be accomplished. Whatever you do, don't get talked in to an automatic payment that comes directly out of your bank account every month. Some lenders charge as much as $7.00 or more for this "convenience" adding even more debt that your minimum payment won't cover. Aside from the probability that you may forget this automatic withdrawal and put your checking account in the hole. Bank fees are just as menacing as lender fees and worsen your credit rating.

If you've had the credit card for some time before you began having financial woes, you can ask for a reduction in the interest rate. Even if you've only had the card a relatively short time; it certainly never hurts to ask. The worse they can do is say no, but you may be pleasantly surprised. It's not as though the financial institution can't afford to give you the break. Interest rates are criminally high and allow for some haggling.

Adding just a few dollars to your minimum payment will help defray the interest; even if you can't do it every month. So study your budget and see where you might be able to save money in one area that can be applied to your debts. Cut back on the grocery bill, your entertainment allowance or that $3.00 a day coffee habit on the way to work. You'll be amazed at how quickly your debt decreases.

If you have collection agencies on your hiney; call them too and negotiate a one time offer to pay them a percentage of the total debt. Start low so you gain a bit of leverage. Explain that you are willing to settle the debt once and for all if he can reduce the amount by 50%. Collection agencies are also in the business of making a buck. They gain nothing if you never pay the debt; which happens a lot. Better they accept half than nothing as you wait out the 7 year period until the smear is removed from your credit report. You may get lucky, or you may not. Just as before, it never hurts to ask. You won't be any worse off.

Now let's review. After completing these steps, you will have done for yourself what a debt consolidator charges good money to do for you. The only thing you can't do for yourself is consolidate your small payments into one larger one; for obvious reasons. Debt consolidators can do this because your money goes into their account and then they make your payments for you. After deducting a fee, that is.

I used a service for three years, before I wised up and took a closer look at what was really going on. The consolidator sent monthly statements that showed how much debt was left on each card, along with a break down of my consolidated payment-who got how much. Quite some time had passed before I was sent a letter from the service, encouraging me to compare my card statement balances with their figures for accuracy. Procrastinating as usual, I didn't take their luke warm advice until many months later. Not only was there a huge discrepancy; some of the lenders had not reduced my debt at all and one was actually higher than it was. In a panic I called the credit lenders. The consolidator had not re-negotiated my due dates. I was accruing late and over limit fees every single month; increasing my debt. For three years I had been paying this joker $20.00 a month and I was worse off than before!

It's your debt; you own it and it's up to you to handle your own affairs. Financial independence can only be achieved through financial responsibility. Don't pay somebody else. You incurred this debt alone; you alone have the power to manage your fiscal affairs. Empower yourself today!