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If one is in severe debt, would it be better to make payment plans directly with the companies owed or make arrangements through a debt consolidation service?


Many companies offer debt consolidation services that make arrangements with creditors. After they work out deals with everyone to whom the debtor owes money, or at least try to – some creditors may not be willing to change the terms of the agreement under which the money was borrowed – the debtor starts making monthly payments to the consolidator and the money is disbursed to each creditor. But not all of it.
Debt consolidation companies generally take a cut of every dollar repaid through the programs they arrange. That can substantially extend the time it takes to get out of hock, so if the debtor has good negotiating skills and a healthy dose of sang-froid, it often makes more sense to work out deals with creditors directly.
A third and often much better alternative is to go through a nonprofit debt counseling agency like Apprisen Financial Advocates. Apprisen, which has been active for more than 50 years, covers its costs through grants and contributions from creditors, so the money paid into one of its plans goes entirely toward reducing the outstanding balance. That allows clients to get out of debt much faster. For more information, call 1.800.355.2227 or consult
-Conrad de Aenlle