Once you have determined that debt consolidation is in your best financial interest, then the next step is to do some serious research. Since rates, programs and service vary greatly with each organization, it is essential to shop around. Many desperate people have lost large amounts of money simply by doing business with the first company that they contacted. Make sure that you do not rely solely on verbal promises; get everything in writing and read everything carefully before you sign it.

In general you should avoid companies who charge a large fee up front while promising to return your money once the consolidation process is complete. All fees should be discussed before any procedures begin. Ask the company about services other than debt consolidation. For example, do they provide a free budgeting session? Do they offer counseling? How much does it cost? How much time do they spend with you discussing your particular situation? The last thing you want is anyone pressuring you into making a quick decision. If after 10 minutes the company is pushing a fix-all program, you should be very skeptical.

You should also find out who funds the company. While it is good to know whether the group is non-profit or for profit, you should remember that just because the company is not for profit does not ensure that its practices will always be in your best interest. There are non-profit debt management companies that charge high rates, do a poor job and act unethically.

When you find an agency that appears to have competitive rates and a program appropriate for your situation, make sure you check it out with your state Attorney General and the Better Business Bureau. These groups will be able to tell you if there are any consumer complaints on file, and if the company is licensed. Taking these measures will help protect you from the surprisingly large number of debt management companies with questionable practices. Some companies misrepresent the terms of a debt consolidation agreement, do not explain all costs, charge very high fees, and/or fail to complete the promised services. There have even been cases where a business that offers