When someone gets into debt and has financial problems, one of the most difficult things for them is the fact that they have a number of different creditors all wanting to be paid - the bank, two or three credit card issuers, a housing or car finance company, and more. Consolidating their debts into one single package makes it that much easier to manage a payments program to get out of debt.
A number of non-profit consolidation companies offer individuals advice and assistance. Non-profit credit counselors can be contacted on the internet; universities, credit unions, housing authorities and military bases may put their members in touch with a consolidation counselor.
Credit card consolidation rolls up all your credit card debt into a single total. This is then made into a new debt which can be paid off on longer terms. However, you need to remember that as part of this consolidation, you'll be asked to put up your house as collateral through a home equity line of credit, or perhaps a second mortgage. It may be better to carry on struggling to pay off the credit cards rather than to put your home at risk. Some consolidation loans also have high up front charges.
Non profit credit card consolidation organizations will offer affordable help. They may offer counseling and other financial assistance as well as or in place of consolidation, depending on the needs of the individual concerned. Generally, the non profit will work with the individual to create a budget and a repayment plan based on their income and spending needs (food, housing, etc); only after budgeting has been carried out will a credit card and debt consolidation scheme be considered.
The non profit will also take over responsibility for talking to creditors. So for individuals who dread dealing with their credit card companies or feel ill equipped to stand up for themselves, this can make a huge difference.
However, there have been reports of some scammers masquerading as non profit credit card consolidation companies. Debtors should be careful about revealing personal details to online consolidation companies, and should ensure the non-profit has IRS 501(c) (3) status as a charitable organization.