Thank you for the perspective. In every field there must be at least some noble people trying to do a good job and provide a value added service to their customers. The biggest concern I have with using a consolidator (even a reputable one) in any way is that they become a barrier to the consumer that prevents them from learning. As with so many other things in life, we often only learn by doing it ourselves.

Reputable debt consolidators, of whom there seem to be few, can “help” consumers if they:

1) Negotiate on the consumer’s behalf with each creditor;

2) Get the creditors to accept a lower interest rate in exchange for satisfaction of the debt in full, upon completion of the program

3) Help the consumer close each and every creditor account.

4) Take all of the consumer’s monthly payments as one lump sum from the consumer.

5) Allocate them, per a plan (not sure if it’s highest interest rate first or what, but it doesn’t matter, it’s a snowball of one variety or another) to each creditor, ON TIME.

Unscrupulous consolidators don’t pay creditors on time (or at all), or don’t negotiate a lower rate.

As The Lean Life Coach points out, this is all for naught if the debtor can’t change the patterns and circumstances that led him to spend more than he had anyway.

I am basing this on a conversation I just had with a friend who is working with a reputable debt consolidation agency through her credit union. Keep your fingers crossed for her, OK?