Debt consolidation can be done in many ways and most of them are familiar to most people. One is to get a new loan from a lender who will then pay off all of your credit card debts. You then can pay one lender, one payment. This is a popular approach that avoids bankruptcy, but only if you can get the loan. Another strategy that people will try on their own, is to slowly transfer all of their debt to one credit card. But the interest rates on credit cards are high and this type of debt can go on forever will no end in site to monthly payments. Another strategy is to raid your retirement accounts in order to pay down your debt. Another way to get out of debt that is getting a lot of press recently is what is called debt settlement. Debt is negotiated down as well as interest rates giving a person a chance to pay back what they owe.