There are people I know personally; that had horrible results with Debt Consolidation companies. Most of them send out payments once a month. if their pay date does not meet your due date, your credit will worsen. They also charge a fee of about $8 per account. I suspect the best you can do is as follows.

Work on paying off your smaller debts, while you still make minimum payments on the larger debts. When a smaller one is paid, dispose of the ability to run it up again.Debt consolidation doesn’t help.
At best, you’ll still owe $20K, but to a new creditor.
At worst, you’ll get ripped off.

Here’s a better alternative:

Set up a written budget, so that before the month begins, every dollar will already know where to go.
Here’s an example:

$3,000 income after taxes

$300 charitable giving
$250 food
$800 rent
$100 gas
$ 50 car insurance ($300 per six months)
$-0- car note (a paid for piece of junk is better than a bunch of payments)
$100 electric bill
$ 50 gas bill
$ 75 cable bill
$ 40 water bill
$ 50 clothes
$ 50 fun
$1135 savings / attack the debt

Once you have a budget, here are a series of goals for you to meet.

Cut up ALL of your credit cards.
Get current on all of your debts, and pay the minimums.
Save $1,000 cash in the bank.
Pay off your smallest debt, in full.
Pay off the second smallest debt, in full.
Repeat until all the debts are paid.
Keep saving cash until you have the 20% down for your house, plus $15,000 cash, just in case you lose your job two weeks after you buy the house.

It may take you a couple years to get to this point, but that’s a lot better than the seven to ten years your credit will be trashed by a bankruptcy.

More steps to follow, once you have a pile of cash:
Start investing, with 15% of your income, but none of the cash that’s in the bank.
Put down $2,000 a year into a 529 plan, to pay for your kid’s college.
Put down any extra money you have into paying your mortgage off.

And now, with a paid for house, enough cash in the bank so that getting the roof replaced won’t blow you away, a pile of money set aside for retirement, there’s only one thing left to do:
Live like no one else.

Need more information? Find information on tax debt

Tags | consolidate my debt