For the consumer whose debts have amassed to such a large amount that they are struggling to make monthly payments, or that have gone into a default state, they start to look for professional assistance. Credit debt consolidation has been around for many years, and most consumers are familiar enough with the term. It is an option, but before leaping into a consolidation program, it is important to understand exactly what it consists of, too.

Most debt carried by American consumers is unsecured. Debt coming from credit card accounts, department store cards and local accounts are all unsecured. They are based on the consumer's promise to pay. In debt consolidation, a loan is obtained to pay off all those debts, and the loan payment is much lower than the previous total sum of payments. The problem is that the loan will be secured, and that means collateral must be put up for it. It's a home or other real estate property, a car, or other expensive items. That means if a consumer defaults on the loan or misses enough payments, the collateral property can be seized. It's a frightening thought and one that many people unfortunately dismiss. Consolidation loans are long term loans with low interest rates, but if one makes all the additions, it's a very expensive proposition with huge, life shattering consequences if things go wrong.

No one knows what will happen in the future unless they have a very accurate crystal ball. A job that seems secure can suddenly turn into no job. A marriage that is solid as a rock can run into problems and end up in divorce. And, no one knows when a serious illness can hit either. These are all things that can affect the pay back of a consolidation loan, and when a consumer feels they might have little left to lose, the loss of a home can be devastating. So, credit debt consolidation is a very serious financial maneuver to consider.

There are other methods, and before making any decision involving credit debt consolidation, the consumer should investigate debt settlement and debt management as alternative options. These means of debt resolution work differently and more quickly than the time it takes to pay back a consolidation loan. By working with a respected debt relief company, a consumer can reorganize their debts, negotiate the balances, and be debt free within a fraction of the time it takes to pay back a consolidated loan.

Many people feel that the choices are credit debt consolidation or bankruptcy, and need to understand that there are things somewhere in between. That's what debt settlement and debt management are.