Paying off everything we owe on our own is the preferable way to handle debt. But sometimes that's easier said than done. Our circumstances often change, making it impossible to even make our minimum monthly payments.

Consolidating debt is an option for people who can't make payments. You could do this alone by putting all you debt on a low interest credit card or get a home equity loan. There are also credit counseling services available as an option.

How Does Credit Counseling Work? Credit counseling consists of negotiating with a client's creditors for lower interest and/or lower payments. Late and over-the-limit fees are often waived as well. Then the client sends the credit counseling agency one payment each month, and the agency distributes the money to creditors as agreed upon. The pros A credit card counselor can usually negotiate a lower rate or payment if you can't. You will be able to pay off your debt faster with the money you save.

You can also plan a budget to repay your debt and also still have some money left for other things if the counselor helps you. The Cons Sometime the monthly payment may be too high for the client to pay. Creditors will only negotiate so much and sometimes the deal they offer may still be too much to handle. If this happens you may have to find an alternative plan to repay your debt or consider bankruptcy.

Credit counseling services charge fees that are added to your monthly amount. If they don't do this they will usually obtain the money from your debtors as a part of your payment. There is some debate as to how going through credit counseling affects your credit. It is noted on your credit report. In most cases, you can't get new credit until you complete the program.

But it could also affect you after your debts are paid off. Many lenders consider credit counseling as being similar to Chapter 13 bankruptcy. Check out a prospective counseling agency first. Just because they deal in credit counseling, it doesn't mean that they are all honest. The Better Business Bureau can help you with this. It's important to weigh the pros and cons of credit counseling.

You may not need to involve another party if you just take the time to work with your creditors first.

Bankruptcy should be your last resort. Have you looked into debt consolidation and other ways of dealing with your credit card debt or other forms of credit? Visit Debtopedia at http://www.debtopedia.com for more helpful tips