Basically, what a debt consolidation plan does is to well, consolidate your debts. This is a program where you get all your various credit cards together, you arrange for them to be paid by one central company that takes care of paying them and then you pay that one company. It can be done in several ways:

• New credit card. This is less often done these days, but some credit cards will still let you consolidate debt onto them from other cards. The key here is that you cut up the other cards so you don’t get into trouble again.

• New mortgage. Again, with the problems in the housing markets, this is harder to find as well, but you can refinance and get the money to pay off your bills, even today. Just be sure that you follow the advice above and cut up the cards so you don’t end up back where you were, but with a larger mortgage to boot.

• Debt Consolidation Counselors. These guys will negotiate on your behalf with you credit cards and other creditors and they will arrange a lower payment for you. It doesn’t always work though and you do need to watch out for con men. However, in general, this is a great choice and probably the best choice if you find some with a reputable debt consolidation plan.