If you are facing bankruptcy in Iowa, you may be tempted to try a debt consolidation company. These companies make big promises to help eliminate your debt, often for pennies on the dollar. However, are they actually helpful? Is it better to go through one of these companies than to just file for bankruptcy?

According to Dave Ramsey, debt consolidation companies are often going to harm you more than help you. The first issue is these companies charge you a fee to work with them. The fees can add up, too. That money would be better spent towards your debt.

Another issue is they may be able to get you lower interest rates, but they cannot get you a guarantee those rates will stick. The companies can always raise your rates in the future. 

Lowering payments, which is a common tactic, only extends how long you are in debt. These companies cannot wipe your debt out. You will still owe all the money, but now you are paying less each month, so you will pay on them for a longer time. 

These companies also often do not help you learn how to be better with your money. Even if they do help you get out of debt, if your money management skills have not changed, then the chances are good you may end up in debt again in the future.

The bottom line is these companies may help in the short term, but you need more significant help to really get out of debt for good. This information is educational and not legal advice.