I have a desperate financial situation and I don’t know what to do. I was ill and lost my job, so I could not pay my bills. Now, almost all of my debts have been sent to collectors. I have been advised to file for bankruptcy, but I don’t want to do that. I don’t know if a consolidation with a consumer credit agency will help. Please advise.
—E. Palmer, Via the Internet
Though you feel overwhelmed, you do have options. The first thing many consumers think to do is file for bankruptcy, but don’t rule out debt consolidation.
Since you are now in a better position to pay down some of your debt, I would recommend consolidating it. Organizations such as the Consumer Credit Counseling Service (www.cccsatl.org) and the National Foundation for Credit Counseling (www.nfcc.org) let you speak with a counselor for free. If you decide to use one of these services, there’s a small setup fee, and your current financial standing determines if you will incur any other service costs. In turn, the organization will negotiate on your behalf for lower interest rates and a more convenient payment option.
Before you decide whether to consolidate, read Talk Your Way Out of Credit Card Debt by Scott Bilker (Press One; $19.95) and The Budget Kit: The Common Cents Money Management Workbook by Judy Lawrence (Dearborn Trade; $18.95).