Credit Counseling - Counseling of Credits Debt consolidation plans offered by credit counselors do not involve taking out a new loan.  Most unsecured creditors have arrangements with credit counseling firms. Once the credit counseling firm advises your creditor that you are signed up for debt consolidation, the creditor will in most cases reduce interest rates, drop late charges, and drop over the limit charges.  The account is re-aged to show that you are current with your payments.  The reason that creditors are willing to do this is simple- they know that if you are seeking credit counseling, you are taking responsible action to avoid filing bankruptcy.  If you file bankruptcy, unsecured creditors often receive nothing!