Debt Consolidation Help Guide

Knowing exactly where to go when you need help consolidating.

Debt consolidation is something you can do on your own, but like many financial processes it’s often much easier to succeed when you have some help. Not only do you get an expert’s experience to develop an effective debt consolidation plan, you also have someone (or a team of someones) there to help you along the way. As a result, you increase your chances for success and may even gain access to resources and tools that can help you maintain stability long-term so you can avoid more challenges with debt in the future.

The information below is designed to help you understand where to go for help to consolidate your debt. Keep in mind that debt consolidation options are usually specific to a type of debt; the methods for dealing with scenarios such as unsecured debt consolidation, student loan consolidation, and tax debt consolidation each vary. So if you have a range of debts to eliminate, then you may need several types of debt consolidation help explained below.

As always, if you have questions or want an unbiased expert’s opinion on your best path out of debt, we can help. Call Consolidated Credit today at or complete an online application to request a free debt and budget evaluation from a certified credit counselor. We can’t help you consolidate every type of debt directly, but we can help you find the help you need even if you have other debts to consolidate besides credit cards.

Unsecured debt consolidation help

Consolidating unsecured debt doesn’t always require help. Unsecured debts include credit cards, store cards, gas cards, personal loans, medical bills and payday loans. In some cases you can consolidate these types of debts on your own. However, DIY debt consolidation solutions are usually limited by the following:

  1. Your credit score is not high enough to consolidate successfully on your own.
  2. You have too much debt to consolidate effectively on a credit card or by using a personal consolidation loans, such as amounts in the tens of thousands.
  3. You have a concern that you won’t be able to cut a credit habit on your own – i.e. since DIY solutions zero out your credit card balances if you can’t stop charging, you’ll make your debt problems worse instead of better.

If any of the above are challenges that you face then it’s usually better to get help consolidating rather than do it on your own. And in this case, the place you go for help is a credit counseling agency like Consolidated Credit. If you’re eligible, the agency can enroll you in a debt management program which is a form of assisted consolidation. This provides several advantages over DIY consolidation options:

  1. Your credit score is not a factor for qualifying. So even if your score is rock-bottom bad, you can still consolidate successfully.
  2. Since the agency negotiates with your creditors on your behalf, they can reduce or eliminate the interest rates applied to your debts, so you get the benefit of low rates regardless of your credit score.
  3. You can consolidate large volumes of debt. We’ve had clients who have over $100,000 who still qualify for a debt management program and use it to eliminate their debt effectively.
  4. When you consolidate using a debt management program your accounts are frozen, so you can’t go back to charging and running up your balances. This can make it easier to cut a bad credit habit.
  5. Once you’re enrolled you gain access to a range of free resources and tools designed to help you learn to budget and use credit effectively. You also have a credit counselor who works with you directly to create a budget that works so you don’t have to rely on credit cards to get by.

All of these points often make getting debt consolidation help through a credit counseling agency better than going at it alone.

Federal student loan debt consolidation help

Federal student loans can also be consolidated and where you go for help depends on the kinds of student debts that you have. If you have federal student loans including at least one Direct or FFEL loan then you can use a Direct Consolidation Loan to combine all of your debts into one payment. You can also consolidate using one of five Federal Loan Repayment Plans. Using one of these repayment plans also makes you eligible for loan forgiveness if you work in the public service sector as a nurse, teacher or first responder.

All of the above can be done on your own through studentaid.ed.gov. However the process can be complex and tough to navigate if you don’t know what you’re doing. Federal repayment plans that are hardship based require assessments of Adjusted Gross Income (AGI) and family size compared to the Federal Poverty Line in your state and only certain plans out of the five qualify you for loan forgiveness.

So if all of that sounds overwhelming, you can hire a federal student loan consolidation company to do the work for you. The company does not actually consolidate your debt themselves directly. They actually are simply advisers who point you in the right direction within the federal programs and the document preparers who just take care of all the paperwork for you. And, of course, they’re there to help keep you on track after you consolidate to make sure you keep up with things like yearly recertification for hardship-based programs.

Now, if you have private student loan debt (debt that came from a private lender with the application based on your credit score), then the federal programs listed above don’t apply. For this you’d simply take out a private student consolidation loan and handle the consolidation yourself. Just make sure to only use this option to consolidate your private student loans because if you use this option on federal student loan debt it makes you ineligible to use the government programs described above moving forward.

Tax debt consolidation help

To consolidate multiple years of unpaid tax debt to the IRS, you use an installment agreement (IA) that you arrange with the IRS. Basically, the IRS agrees to roll all of the individual years of taxes that you haven’t paid into a single consolidated repayment plan with fixed payments that work for your budget.

Again, you can negotiate directly with the IRS to set this up. Just fill out Form 9465 or apply through IRS.gov. If you owe more than $50,000 there’s an extra form (Form 433-F) that you have to fill out too. Once they provide the payment schedule, make sure it fits your budget comfortably so you can avoid causing further issues with a default.

On the other hand, if you don’t want to deal with the IRS directly or you don’t think you’ll have success negotiating a good repayment schedule, then you can hire a licensed tax attorney to do the work for you. They basically act as the go-between to negotiate on your behalf, which means you may have more success and you’ll certainly have less hassle.

"We are really proud to recommend Consolidated Credit" Kathleen Cannon, President & CEO of United Way of Broward County. Consolidated Credit Counseling Services, Inc. is pleased to announce our partnership with the United Way as a United Way Chairman’s Circle Organization.

"We are really proud to recommend Consolidated Credit" Kathleen Cannon, President & CEO of United Way of Broward County. Consolidated Credit Counseling Services, Inc. is pleased to announce our partnership with the United Way as a United Way Chairman’s Circle Organization.

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Consolidated Credit is honored to receive the 2012 Excellence in Financial Literacy Education (EIFLE) Nonprofit Organization of the Year award. The EIFLE awards acknowledge innovation, dedication and the commitment of organizations that support financial literacy education worldwide. See what Consolidated Credit can do for you.

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