If this is your first time visiting, check out the story behind this blog. Otherwise, please join the others by subscribing to my RSS feed or get updates via email so you don't miss any personal finance articles!

This is a guest post from Debt Lead, who has a debt consolidation website by Kimberly Credit Counseling.

With the economy the way it is, many people have severe financial difficulties. For most, it is usually the last resort but there are some people that give up early and declare bankruptcy, sometimes without even considering any alternatives.

If most of your debt are in credit card debt and you do not want to declare bankruptcy. One option is to obtain a debt consolidation loan and closing all existing credit lines, using the funds to pay off your outstanding debts.

What an unsecured debt consolidation loan will do is consolidate all your unsecured debt and help you avoid bankruptcy. This new money can save you hundreds of dollars per month if you choose to use your loan to pay off existing debt, especially if its used to pay off high interest credit cards.

Debt consolidation loans are repayable over a longer term at a relatively low interest rate, meaning a reduced monthly repayments. If the loan is secured on your property, then the interest rate and payments may be even lower.

Seeking debt consolidation services immediately decreases your monthly payments. It also brings to a stop, and in some cases, eliminates some interest and fees. All you do is pay a new lower monthly payment.

It is an excellent tool that can help you manage and decrease your debt when you just can’t seem to do it on your own. There is no way that you can completely fix bad credit without the ability to reduce debt and pay your bills on time. Having a small monthly payment is definitely in the right step.

A credit counselor can provide you with the option of enrolling in a debt management plan, which provides immediate relief and allows repayment of debts without the high fees and negative ramifications of bankruptcy.

However, your financial situation may be unique so the plan needs to fit your circumstances. Take caution and compare the pros and cons of debt consolidation loans before taking the plunge as there are multiple options for consolidating debts. Which option will meet your needs has to do with whether you can qualify for low mortgage rates on debt consolidation loans, and the total amount of debt you need to consolidate.