Debt consolidation should be a last resort, but not one to completely rule out. When credit card debt puts one's minimum monthly payments at a point where the family is swimming in them, it might be time to get a fresh perspective on the payment plan, which may be the life preserver necessary to avoid bankruptcy.

Now, before a person jumps into one of these plans it is important to understand exactly what a debt consolidation is, some of the dangers involved, and alternatives to traditional debt consolidation.

What is a Debt Consolidation Program?

A debt consolidation program is one where a person's accounts are rolled into one. The idea is that the interest is only on one account, and it might be lower. For instance, it is harder to pay off five credit cards at 20% interest than one consolidated loan for the total amount at 10% plus a fee up front.