Since 2008, as they struggled under the growing weight of 10% unemployment, the deepening recession, and counter-productive political bickering, Americans quietly changed their attitude toward debt. As the 2011 holiday season approached, stores advertised the time-honored concept of the “lay away” and more customers paid in cash than ever before. Gone are the days of the careless credit card swipe. The new imperative is simple: make debt go away.

Unfortunately, most people are struggling under multiple debts, juggling multiple payments, and multiple interest rates. Often the only way to really get ahead is to consolidate the total amount into a single payment at a single interest rate. What are some of the ways in which people attempt to accomplish this?

Home Equity Loans Were the Gold Standard

Since the home in which they live is, for most people, their greatest asset, the gold standard in debt reduction used to be either taking out a home equity loan or refinancing (renegotiating the mortgage) with a cash-out option, which was then used to pay off creditors. One of the principle contributors to America’s severe economic downturn, however, was the collapse of the mortgage industry concurrent with a catastrophic plummeting of the real estate market. Most people are now either over-leveraged on their homes or cannot qualify for a refinance due to their existing credit situation.

The same is true for personal loans, sometimes referred to as “signature” loans. It is extremely difficult for individuals to go to the bank and take out a loan now, especially if they have multiple credit cards with large balances. Creditors focus more sharply on perceived risk and hold tightly to their loan dollars. Anyone who is considering credit consolidation is likely doing so not just to pay off their debts, but also to repair their credit score.

Debt Consolidation with Renegotiation

Currently more than 181 million Americans hold in their possession a total of 609.8 million credit cards with a total revolving debt of more than $793 billion. The average person is juggling balances on four cards, with four payment schedules, and four interest rates. Often the best they can do is a “rob Peter to pay Paul,” shuttling discretionary income around to simply hold the line. They are facing years of payments with little progress toward paying off the principle.

Increasingly, in order to find a debt solution program, people are turning to professional debt consolidation services. One of the greatest assets these companies bring to the table is skill in renegotiating terms with existing creditors. Companies want customers to pay them. They would prefer to collect interest over years and years, but the bottom line is that they don’t want a default, which is a total loss from their perspective.

Once the consolidation company arrives at new terms, the entire debt amount is bundled into a single payment made to the company, which in turn disburses it to the individual creditors. It is common for a debt that would take 15 years or more to resolve with only minimum payments to be paid off in as little as four years under this arrangement. Granted, those four years may represent strict living and tight budgeting for the card holder, but the end result is living debt-free, maybe for the first time ever.