Is debt consolidation really the best option? How does debt consolidation really work?

No, don't do it. You're not paying off your bills your just moving them around when you do a debt consolidation. What will keep you from going back and recharging up your credit cards again. Cut up your cards and work on paying down your bills as quickly as possible. Take a 2nd job if you have to, but don't borrow more money to pay off bills!

Nope just pay what you owe. Call the people you owe and tell them you want to work out a payment plan, they will be more than happy to work with you. NOt the collection or anything like that, go directly to the people you owe, tell them you want the interest stoped and that you will commit to paying what you owe no more no less. If you consolidate your debt you will be basically getting into more debt and usually will involve your home. Remember the people you borrowed from all they want is the money they lend you and some interest, but most important what you borrowed so if you talk to them and tell them you want to pay them the amount you borrowed they will 99% of the time agree. Is better to get all they lend than get partial, because that's what you will be doing when consolidating your debt you will be offering a portion of what you owe and most likely they will take it, however this will affect your future borrowing potential. Many of us make mistakes borrowing getting in debt, but very few actually pay what they borrowed, and it will not only help you in the long run but will make you a friend to their particular lenders. Just don't agree to pay them a certain monthly payment and you wont because they can turn around and tell you that the agreement is off. I would do that call them up have them writte up an agreement , have them send it to you. Or vise versa you write up the agreement , send it to them and see what happens. GOOD LUCK and remember that you did borrow the money so put your self in their shoes and ask your self if you had lend money to someone what will make you happy. I am sure you will agree at least paying what you borrowed. GOOD LUCK and if still in doubt ask questions to whom told you about consolidation as to how much is going to cost you? What are the terms? What if you miss a payment? What is the interest rate you will be paying?How much are they making off the amount you will be paying? you will see that at the end you will realize that with all the interest and fees you will be better off talking to the lender and working something out.

All debt consolidation is - is to bundle all your debt under one loan. You make one payment instead of many. The interest rate may be higher than your paying on other debt and because it's a larger amount you will be paying more interest.

It's certainly the best option for the company holding the consolidation loan, providing you don't default. If you do default they will come after all your assets.

When you consolidate, you are basically combining all your revolving and installment debt into a lump sum debt. In order to make sense, the trade-off should be a lower interest rate (lower than the average of current debt) and therefore a lower payment. Ideally, you would pay more than the minimum towards the consolidated debt in order to pay it off faster than if you just paid minimums on all the separate debts. Sometimes people use home equity to do this and sometimes unsecured or collateralized installment loans (collateral could be a car or boat, for example). In most cases it makes sense, just be careful. All too often people consolidate credit card debt and then start charging up those cards again, ending up with the initial consolidated debt and the new revolving debt. So if you are going to do it, be disciplined about paying it off before accumulating more!

A small loan consolidation with low interest is the best I found interesting information about your answer & options here. http://all-debt-consolidation-loan.blogspot.com/2007/07/loan-consolidation.html

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You should borrow from Peter to pay Paul, kinda like our government is doing. You'll get away with it until both Peter and Paul ask you to pay them their money back.

I would say if your looking at this option then your having trouble paying anyway!! DUH. No it's not a good idea and it is nearly as bad as a bankruptcy on your credit.
Go see a lawyer and be done with it.

It is a good option, but do your homework, and shop around.

What debt consolidation really is is this:

The company pays off all your debts, and all you have to do is pay one low monthly fee to them.

Easier if you have many debts, and can save you a lot of money in the long run.

no.

paying your bills on-time is the best option.

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