I am getting ready to sign on with a company that will negotiate my
credit card debt for a fee. Claim to have me debt free in 36 months by
making one flat monthly fee and when I get enough money they will go
to a credit card company and negotiate a payoff. My credit card debt
is 36000. My question is there a better option? they want 5500 dollars
payed over the first 16 months for there service. I dont want to file
for bankruptcy. bills are 2 to 4 months past due. Thank You.

How much do you make? How is your credit? If you do not have at least
$1000 to spare per month for the next three years you simply will not
pay off your debts, consolidation company or not.

If you do have that much to spare each month, you may be better served
by taking care of this yourself. Time is obviously of the essence here
as the bills are already significantly past due, so you'll have to be
quick. Shop around a few of your local banks, explain the situation
and present proof that you can raise the money, and see if you can
swing a loan or line of credit the size of what you owe on the
combined bills. If you can, pay them all off with this money. You will
still be exactly the same amount in the hole, but now it will be to
one company and with lower interest rates and fees. This is
essentially the same service the debt consolidation company is
offering you, but if you can negotiate it with a bank yourself you
will simply be paying 36000 + interest, and not 41500 + interest.

Bankruptcy looks terrible on a credit rating, but debt consolidation
companies also look somewhat suspect. If you want to save your credit
rating, the best option is to do the consolidation yourself, and
you'll hopefully save some money in the process. Expect to be turned
down by quite a few banks before one offers to help you out, though -
this will take quit a bit of footwork.

If you can't expect to come up with $1000 each month for the next 36
months, though, consolidating with one company won't help in the long
run. To convince a bank to take on your loan you will need to prove
that you can stay afloat long enough to pay them back. This may take
some tricky budgeting, so start looking at what you can cut back on
and where you might be able to pick up some extra income. If you
absolutely can't come up with a way to scrape together the money, your
only sensible option is bankruptcy - don't dig yourself any deeper
into this hole!

I have read and heard alot of bad things about these debt free
companies.  Unless you know someone who has successfully used it, I
would recommend that only as a last resort (perhaps the step before
bankruptcy).

What you can do however is become radical about getting out of debt. 
The freedom in your life and great relief from the stress of debt will
make the sacrifices well worth it.  Here are some ideas to help pull
you out of debt in the shortest time possible:
--If you have a car that is even mildly expensive ($7000+) sell it and
buy a much cheaper model.
--If you eat out, stop.  If you eat expensively, stop.  Living off or
rice & beans... some cheap pasta...  oatmeal...  anything dirt cheap
can save you thousands a year.
--Work overtime if your job allows it.
--A second job perhaps?
--Stop spending money on entertainment.  Play games with your family
(if family applies) at home, free online games, walk in the park,
exersize more... you can enjoy your free time without spending money.
--If your home loan or rent is costing you too much then move (sell
the house if you own it) and find a cheaper house/apartment to live
in.
I'm sure you can come up with some other radical ways to save
thousands of dollars a year.  I think most people could be debt free
in 2 years if they are really serious and willing to make sacrifices.

Some of the above ideas come from a book called "The Complete Money
Makeover" by Dave Ramsey.  It is a great tool and I highly recommend
it for anyone.

I have a nasty feeling that many of these credit consolidation schemes
leave you poorer and don't necessarily leave you debt free.

This is a lot of money and there is lots at stake. You may ask for
references (though they could well tell you "no!") but I would
strongly suggest that significant due dilligence on your part is
warranted.

Good Luck.

What state are you in?
I used to be a branch manager for a Finance Company and my experience
with Creidt Counseling was very very good. I had customers who after I
gave them a loan (they were okay when I lent them money) we unable to
make their payments in a timely manner. In fact I recomended my
customers to the Credit Counseling Service. However that was just a 2
peson operation, local, and was owned and run by a totally honest
individule. I forget the name of the business but the guys name was
Wayne.

Wayne was very good. He would call me, give me the facts (all with the
customers approval), the whole story on the customers situation and
negotiate a re-payment plan. If he could not help the customer he
would tell them the truth, he would send them to a bankruptcy
attorney.

Wayne was totally honest with the creditors. He would tell me that Joe
XXX never stopped in on Friday and dropped off the weekly credit
stipend Wayne needed to pay everybody. In other words he was honest
with the debtor and honest with the creditor. Many, well several, of
my customers got relief, emotional reliefe by going to Wayne. All the
collection calls stopped, which was one of the deals Wayne made with
the Creditors, we would call Wayne and not the customer. It really did
work out for people, it was a good thing.

People can get behind for legitimate reasons, loss of employment,
decrease in hourse, unexpected expenses. Wayne took the burden over
from the debtor and his plans worked great.

I don't know if it is feasible for you to find another Wayne, but you
could start by contacting your creditors and ask them for a
recomendation. If they recommend someone, then msot likely they will
work hand and glove with that person. I think it is a great service! I
would not consolidate your debt, I would suggest that you contact your
creditors and ask them for recomendations rather just picking a
company off the internet. And if you go with it, stick to the plan.

Good Luck to you! I hope you do work your way back financially, I am
cheering for ya!!!

Hello, I want to thank all of you who have commented on my question. I
keep reading each of them over and over. They make alot of sense. Once
again thanks. I am new here on ask a question so if I am doing
something not right please let me know. Thanks.