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What Kind of Bill Consolidation Programs Exist?

What Kind of Bill Consolidation Programs Exist?
Betsalel Cohen
UpdatedApr 23, 2024
Key Takeaways:
  • Personal loans there are a popular program
  • If you have poor to fair credit look for a bill consolidation program that deals with hardships.
  • Use the Debt Navigator to find a program.

Can You Help Me Find the Right Bill Consolidation Program?

Due to medical expenses relating to an emergency room visit not covered by my health insurance, I exhausted my savings and still have debts I cannot afford to pay. My debts are in the form of credit cards, unpaid medical bills, as well as some miscellaneous bills. As you can imagine my credit is poor and I am struggling. Can you recommend a bill consolidation program to help me get back on my feet again?

Thanks for your question about bill consolidation programs for people suffering financial hardship.

One of the most frustrating parts of being in debt is trying to figure out all of your different payments. It seems like just when you're on top of your finances, another bill arrives in the mail and throws you off kilter again. For people trying to pay down their debt, medical expenses and other emergency bills are a significant cause of financial hardship. According to a report published by Urban Institute from 2017,

"Nearly one-quarter (23.8 percent) of nonelderly adults reported past-due medical debt in 2015, with the highest prevalence found in the South

Bill consolidation is not for every situation. However, besides personal debt consolidation loans for good credit, there are various debt consolidation programs for people in financial hardship.

Three Bill Consolidation Hardship Programs

There are various bill consolidation programs. For example, if your credit score is good to excellent, but you ran up a lot of credit card and medical expenses, consider taking out a low-interest rate bill consolidation loan, which combines different debts into one affordable monthly payments. A debt consolidation loan allows you to pay off your debt quicker and cheaper.

However, if you are struggling with debt and various bills, then most likely your credit is hurt, and you are looking for a way to lower your monthly payments. Fortunately, several bill consolidation programs address varying degrees of hardship, from mild to very hard, are credit counseling (and a debt management program), debt settlement, and bankruptcy.

Bill Consolidation Program #1: Credit Counseling

If you are suffering a mild hardship, then a Credit counseling and debt management program (DMP) offer you the chance to consolidate all of your credit card bills into one monthly payment. Credit counseling helps you to set a household budget and understand your financial capabilities. If appropriate, you can enroll in a debt management plan with creditors to set up interest rate concessions and fee waivers to pay-off the entire enrolled debt balances over 60 payments.

Bills Consolidation Program #2: Debt Settlement

Debt settlement is a bill consolidation program for households suffering a major hardship. Just as you mention, medical bills are a common source of financial stress. In a debt settlement program, you stop making your monthly payments on your enrolled accounts. Instead, you make one monthly payment to a designated account. As the balance in this account grows in size, the debt settlement program provider negotiates with your creditors. Over time, the debt settlement program provider will negotiate settlements for a fraction of the original balance due. The amount of the debt reduction depends on the size of the balance, the creditors' policies, and other circumstances.

Find a Bill Consolidation Program

Are you struggling with debt? Receive a no-cost, no-hassle debt consolidation quote from one of’s pre-screened debt providers.

Comparing Debt Settlement and Debt Management Programs

Debt SettlementCredit Counseling Debt Management Plan
Repay Full BalanceNoYes
Credit Score ImpactModerate - SevereLow - Moderate
Creditor Collection CallsYesNo
Possibility of LitigationYesNo
Close Enrolled AccountsYesDepends
Typical Program Length24-36 months60 months
Monthly PaymentModerateHigh (3% of enrolled debt balances)

Debt Settlement vs. Credit Counseling

Here is a table comparing two bill consolidation programs:

Bill Consolidation Program # 3: Bankruptcy

Bankruptcy is intended to help people in severe hardship. While Chapter 7 bankruptcy wipes out all of your debt, it is tough to qualify. However, a court-approved Chapter 13 bankruptcy creates one payment for your unsecured debt, usually over a five year period. Your monthly payment amount will be based on your monthly disposable income as defined by the bankruptcy code. After you have made payments to your creditors for five years, any remaining unsecured debts will be discharged. Chapter 13 is commonly used by debtors whose assets exceed the exemptions offered by state law.

Still Not Sure Which significant Consolidation Program is Right for You

Try using Debt Navigator, an innovative free tool to help you analyze our situation and provide real debt consolidation solutions.

I hope this information helps you Find. Learn & Save.



Debt statistics

Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q4 2023 was $17.503 trillion. Housing debt totaled $12.612 trillion and non-housing debt was $4.891 trillion.

A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.

Collection and delinquency rates vary by state. For example, in Wisconsin, 16% have student loan debt. Of those holding student loan debt, 6% are in default. Auto/retail loan delinquency rate is 3%.

Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.