When looking into your debt consolidation options, the main key point the whole plan should focus around is your monthly budget. You have to take into account exactly how much you make each month, what expenses you have and how much you have left over to pay off the debt. You can then find a schedule, payment total and interest rate that fits.
Though this sounds straightforward, many people do not take the time to write things out, instead just guessing and making assumptions about what they can pay. This is often why debt increases, even with honest attempts to pay it off.
For example, perhaps you make $3,000 every month, after you pay your taxes. Out of that, you must cover your house payment of $1,000. You also have to consider your utilities: power, gas, water, the phone bill and the TV/Internet bill. On top of that, you must factor in recurring costs like gasoline and food.
When you list this all out, you may find that you have $600 left over each month. If you assume that you'll need $200 for expenses that you don't think of -- medicine when you get sick, for instance, or home repairs -- then you have $400 left to pay off your debt. You may be able to consolidate what you owe into one monthly payment. How long those payments last and how much you can pay every month depends on what is left in your budget. If you can't find a plan that fits, you may need to reconfigure other parts of the budget, cutting costs to free up more money.
Budgeting always sounds easier than it is, and you may have to tinker with it for a few months to get it right. Take that time to look into debt relief options like consolidation and bankruptcy.
Source: Credit.com, "5 Steps to Reduce Your Debt: Do-it-Yourself Debt Reduction," accessed July 08, 2016