Question: Is debt consolidation a feasible solution for unemployed?

It depends.

Debt Consolidation has gotten a bad name in some circles because some people don't read the fine print before signing up for a program. Even if your debt is reduced by 50 percent or more you still have to pay the reduced debt. The service puts time and money into getting your debt payments down. Doesn't it make sense that they would come after deadbeats?

Some have operated fraudulently. Here is how to identify the scams:

• If they ask you for money up front for "fees," it's a scam.
• If they don't reduce your payments, it's a scam.
• If they promise you the sky, it's a scam.
• If they extend the term but leave you with a bigger debt load, well... that's your call, but...

(The third point above is true in almost every case when it comes to love or money.)

The truth is that if you have a lot of unsecured debt, consolidation may make sense. Unlike bankruptcy, debt consolidation will have little effect on your credit rating and can actually improve your credit score. Second, debt consolidation can lower your payments significantly. Third, debt consolidation allows you to make just one payment instead of three or four if you have multiple credit cards.

The only case where bankruptcy makes more sense is if you absolutely cannot afford to make any payment. In that case, the debt consolidation company will come after you if you fail to pay, and you would be better off going bankrupt.

This is important: If you do go the debt consolidation route, you still have to modify your spending behavior. It can be all too tempting to spend the money you save because suddenly you have more in your pocket every month. Do not fall into that trap! Debt consolidation is only half the equation. You have to be smarter with your money overall!

If you're considering debt consolidation as a solution, I recommend you check out CareOne(SM) Debt Consolidation

.

(SurviveUnemployment.com receives compensation for advertising the CareOneSM brand of debt relief services based on each qualified consumer who links to the CareOneSM website directly from our site.)