Title: Why To Avoid Debt Consolidation Word Count: 504 Summary: With all of the ways to pile up debt is it any wonder that so many people are obsessed with credit and debt consolidation? After all, it doesn’t take very much time (or really even very much effort) to go from in the black to drowning in the red. There are student loans, credit card debt, medical bills, store accounts, utility bills, etc. It can be very overwhelming. This is where the debt consolidation comes in. There are all sorts of companies that are making a fortune from... Keywords: Article Body: With all of the ways to pile up debt is it any wonder that so many people are obsessed with credit and debt consolidation? After all, it doesn’t take very much time (or really even very much effort) to go from in the black to drowning in the red. There are student loans, credit card debt, medical bills, store accounts, utility bills, etc. It can be very overwhelming. This is where the debt consolidation comes in. There are all sorts of companies that are making a fortune from helping people to consolidate debt. But beware! Often opting for debt consolidation is not actually the best route to escaping debt or rebuilding your credit. In fact, there are many ways in which consolidating debt can hurt your credit record and put you further in debt. Here are the risks that are involved in debt consolidation: In many cases opting for debt consolidation is only slightly better than declaring bankruptcy (which, as we all know, is credit score suicide). In fact often the credit agencies will view consolidating debt as a chapter thirteen bankruptcy. This is because a chapter thirteen bankruptcy is classified as “realigning debt.” This is a huge black mark on your credit record and could affect future credit applications (like applying for a home loan). Finding an honest debt consolidation company can be a long hard haul. Most debt consolidation companies that you will find on the internet are interested in only one thing: profit. Sure, they say that they care about consumers and repairing your credit rating, but then they turn around and smack a bunch of extra fees and a high interest rate on your account. The fees and high interest rate often mean that you will end up paying more to the debt consolidation company than you would by just paying off your debts individually. Often consolidating debt involves doing something like taking out a second mortgage on your home or a home equity line of credit. Run away if this gets suggested to you. This won’t cure the debt problem. You still have to pay off the second mortgage of the credit line. And if you can’t, then that puts your home in danger of being repossessed. Losing your home is much more disastrous than taking a long time to pay off your debts. Look, debt needs to be repaid. That is just the sad fact. There is no magical quick fix to get rid of it. The thing to keep in mind is that, as long as you are paying on your debt, then your credit should steadily improve over time. Also, a steady repayment history of debt looks far better on your credit report than a lot of “settled for less than amounts owed” showing up. That is what will happen if you go with a debt consolidation. Even though it is not fun, the best thing to do is get some credit counseling, talk to your debtors and work out a repayment plan.