Credit counseling agencies can often help. These agencies negotiate directly with creditors to reduce monthly payments and perhaps lower interest rates or eliminate late charges. Most often, you make one large monthly payment to the agency, which then sends payments out to your various creditors. The goal of most credit counseling agencies is total or near total payment of your debts, which may take years. Consumer Credit Counseling Service has branches in many cities.
People take out a debt consolidation loan to pay off existing debts.
The new loan offers smaller monthly payments. These loans usually have a high interest rate and are often secured by household goods or a second mortgage. Although successfully used by many, these loans have two potential problems. If you eventually have to file bankruptcy, you no longer can simply discharge this credit card debt. Instead, you must continue to pay your second mortgage in order to keep your house.