Part of Our Healthy Finance Series:

Bad Credit Debt Consolidation

Having bad credit is not a disease. It's a normal side effect in our economy.

Think about it... how many times have you received an offer from a bank and/or credit card company in the mail? Probably more times than you can count. In fact, they're even popping up in our email on a daily basis. Credit issuers are literally spamming their customers, and those they hope to be their customers, with "special offers" on a continuous basis.

It's difficult to remain debt free in an environment such as this. Bad credit happens, and it happens often, but what do you do when you realize something needs to change? When you get to the point that you're afraid to answer the phone and the thought of sitting down to pay your bills makes you want to flee?

Well, when you find yourself in that kind of situation, it's time to consider debt consolidation and it's time to educate yourself on what that is.

The most common known form of debt consolidation is receiving a loan to pay off all of your other debts.

Ideally, what you'll want to shop for is a loan with a lower interest rate than your current debt.

Don't fret! Just because you have bad credit does not mean this is impossible. Far from it, in fact. There are many loans out there tailored for the person with poor credit. You most likely will have to pay a higher interest rate than someone with better credit, but it is highly possible that the interest rate will still be lower than your current debt.

If you own a home, you're in even better shape. Why? Because you have collateral that can be used in order to get that loan. You can either refinance your mortgage or shop for a home equity loan. While these do put your home in danger if you can't make your payments, they will reduce your monthly outflow, possibly to a considerable amount.

Loans, however, are not the only form of bad credit debt consolidation. Often, if you call each of your creditors and explain your situation to them, they will reduce your interest rates or even the payoff amount. Why do they do this? They don't want you to declare bankruptcy. If you are uncomfortable about placing these phone calls, or have tried with no luck, there is still another option.

There are credit counseling agencies that will do this work for you. Most of them (though not all) will charge you a small fee, but they are professionals and know what to say to get your debt reduced.

One word of caution.

Before trusting anyone to manage your debt for you, check them out with the Better Business Bureau. It is always in your best interest to be informed about the people you are turning your finances over to.

Don't be ashamed about your bad credit, but do work to get it resolved so you can have a stronger financial backbone to live your life on.