The most common solution sought is Debt Consolidation or a consolidation loan but this is often too little, too late and will cause further financial difficulties.

These consolidation loans may be a good solution for those who are still on top of their debt load, just looking to simplify it. For others, it often causes deeper financial trouble by masking the debt with a lower monthly payment, only resulting in slower payoff (if you can continue making the payments) additional interest, and fees. Remember, You cannot borrow your way out of debt!

The nuts and bolts of the consolidation loan basically consists of a transfer of debt from one place to another, usually "consolidating" several loans into one larger loan. (For example transferring the unsecured debt into a secured Home Equity Line Of Credit. ) The debt itself is not lowered, only transferred. Often, this transfer has a fee as high as 3% or more. Basically, by consolidating, you increased your debt and lengthened the time you will be paying on it. In many cases, in order to lower interest rates, this loan comes in the form of home equity or other secured loan options. The benefit is a lower APR. The tricky part is now your loan is secured, putting your collateral at risk if it doesn't work out, and in some cases "forcing" bankruptcy in order to save your home. These solution is obviously no solution for secured debt issues as it only generates more of it!

What is interesting about consolidation is the low success rate of less than 2%! Why? Usually due to the fact that this only "buys time" and is not a real solution. For those needing solutions, look elsewhere!

Each person will define their own parameters for success.

You must analyze your own situation and decide what is best for you. Ultimately, if you are unable to pay your debts as they stand, consolidation may not be a good choice.

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