Debt Consolidation
One payment instead of many
Debt consolidation isn't a loan and it isn't settlement. It's a way of combining what you owe into a single monthly payment, worked out with a counselor before you agree to anything.
Chapter 01
WITH DEBT CONSOLIDATION, IT'S HARDER TO BE LATE WHEN YOU'RE MAKING ONLY 1 PAYMENT
Most people who call us aren't behind because they don't have the money. They're behind because they're tracking five or six due dates against one paycheck, and something always slips. One card gets paid, another gets skipped, and the fees start stacking on the one that got skipped.
Consolidation collapses that down to a single payment on a single date. You still owe what you owe. What changes is how many places you're sending money to keep track of, and how much room there is for one bill to fall through the cracks while you're dealing with the other four.
Statement paper fanned across a desk with a pen resting on it
What it is, and what it isn't
It's not a new loan against your house or your paycheck. Nobody is lending you money to pay off other debt. It's also not debt settlement, where a company negotiates to pay creditors less than you owe and your accounts sit unpaid while that plays out.
What it is: your existing balances get organized into one plan, and one payment goes out each month to cover them. A counselor at our Lavaca Street office goes through what you owe, line by line, before you sign up for anything, so you know exactly what's included and what isn't.
Chapter 03
Who this actually suits
It tends to fit people juggling several credit cards or other unsecured balances who can afford roughly what they're paying now, just not in five separate transactions. It's not the right tool for every kind of debt, and a counselor will tell you plainly if it isn't the right tool for yours.
There's no credit check to find out. You don't need to own a home. The call is free, and nothing gets signed until you've heard how it would work for your specific balances.
What the single payment actually replaces
Before: separate minimums to separate creditors, on separate dates, each one able to hit you with its own late fee if it's the one you forget. After: one payment, one date, distributed out to those same creditors on your behalf.
You still get a record of where the money went. Receipts come from our office and from each creditor every month, so you can see the payment land in both places rather than taking anyone's word for it.
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How this compares to the formal program
What's described above is the idea of consolidation. If you want the mechanics, how the agency actually sits between you and your creditors each month, read the debt consolidation program page. And if you're still deciding which kind of help fits, start at debt help.
Talk it through before you decide anything
A counselor will go through your balances with you on the phone, at no cost, and tell you plainly whether consolidation fits.