The most common question posed by skeptical debtors is whether or not bill consolidation will really lower their monthly payments. The answer is: it can, but before a consolidation program can begin to do its job, you will need to have an understanding of how the program intends to help you and why it works the way it does.

The bill consolidators you will be working with have been trained to help you get out of debt. They are schooled in financial matters, and that is why creditors are willing to negotiate with them when it comes to your debt. Creditors trust that the consolidation company you are working with will really help you catch up and thus, get them their money. Often times consolidation companies have negotiated deals with the creditors to stop or lower interest rates, or to eliminate overdue fees. These deals are essential to making the program do its job.

Now that you understand why they are able to do what you are not, we can look at how the process works. The first step towards consolidating your debt is finding a program and a credit counselor to work with. Your credit counselor will look at all of your debts, work with your creditors, and offer you an opportunity to roll all of your debt into one payment. From here, two things can happen: a) you can take out a consolidation loan, or b) your counselor sets up a payment system and a budget for you to follow.

If you decide to take out a consolidation loan, your creditors will be paid off and your only payment will be to the consolidation company. Now you will only be paying interest on one loan, and the program will allow you to stretch out payments to make them more manageable with your budget. Unfortunately, if you are not able to keep up with these payments then your only option is going to be bankruptcy.

On the other hand, if you choose to take the credit counseling option you will still be making a single payment, but on different terms. All of your debts will be rolled into one payment, which you send to the consolidation company. From there, the money will be split accordingly and sent to your creditors. This will not change any of your debt or lower it, but it will give you a schedule to keep and a single payment to keep track of.

No matter which path you choose to go with, some things will remain the same. Credit cards, for instance, will be deactivated upon entering the program. This will prevent you from accumulating any new debt while paying off the old debt. You will also have access to a credit counselor in both cases, though the second option is much more direct than the first. Either way, your counselor will be tracking your progress and providing you with any helpful information that they may have.

As you pay off your debts you will be sent regular reports from your creditors and the consolidation company. It is reassuring to be able to see that you are making progress and to make sure that your money is going exactly to where it needs to go. Now is the time to make a list of exactly what you are looking for in a consolidation program and start looking for the one that meets your needs.