Every problem has a solution. Thankfully, for the growing problem of credit card debt, the solutions are also multiplying.

Debt consolidation is a relatively new breed of service that bills itself as an alternative to bankruptcy.

The consolidation companies, many of which are non-profit, claim to reduce monthly credit card payments by lowering interest charges, or eliminating them altogether, and &uot;consolidating&uot; the charges into one monthly bill by negotiating with your creditors.

According to the Web site edebtconsolidation.com, the services are a &uot;win-win&uot; situation for consumers, because they pay less and get the convenience of paying all their debts in one monthly payment while restoring their credit rating.

&uot;Perhaps best of all, this program is largely or entirely paid for by creditors,&uot; the site states.

But why would credit card companies do this, much less for free?

&uot;Most creditors are willing to work with you because they would rather get something rather than nothing,&uot; Mike McCormick, managing attorney for Bond, Botes and Associates personal consultants in Biloxi. &uot;If the person does a chapter 7, (the creditors) are not going to get a penny.&uot;

McCormick said in an overwhelming number of Mississippi bankruptcy suits – 99 percent – creditors are left empty-handed after the liquidation process because of certain exemptions required by law.

Somewhere between Chapter 7 bankruptcy and debt consolidation is Chapter 13 debt consolidation or bankruptcy, which McCormick said he deals with on a daily basis.

Like debt consolidation, a person filing Chapter 13 follows a plan to pay a lowered monthly payment to his creditors through a third party, called a trustee.

Filing under Chapter 13 allows the debtor to keep valuables, such as houses and cars, which might be lost in Chapter 7 bankruptcy.

McCormick said many of his Chapter 13 clients are people who have been denied by debt consolidation services because they do not meet certain requirements, like being up-to-date on car loans or mortgages.

Mississippi banking Commissioner John Allison said consumers should be wary of any company claiming to reduce debt. Partly because of their newness, debt consolidation services are not regulated at this time, he said.

&uot;If you could ferret out the reliability and sincerity of the people doing it, I would recommend it,&uot; Allison said, adding he would be less suspicious of the free services.

Sammy Porter, president of United Mississippi Bank in Natchez, said people wishing to pay off credit card debt do not necessarily need to go through a debt consolidation service.

&uot;The first step is to identify you have a problem with your credit cards,&uot; Porter said.

That hurdle leapt, Porter then tells people to &uot;map out&uot; their finances, pitting income against expenditures to find out what they can afford to pay and contact the creditors themselves.

&uot;In the banking business, if a customer comes in and says ‘I have a problem with my credit cards,’ we’re going to be more than willing to help them,&uot; Porter said.

Credit card companies, especially banks, would rather deal directly with the borrower than a third party, Porter said, because &uot;they feel like they have a relationship&uot; with them.

The Consumer Federation of America also suggest calling creditors yourself.

If you don’t feel comfortable calling credit card companies yourself, a national non-profit organization called the Consumer Credit Counseling Service can negotiate with creditors on your behalf and help you develop a budget plan.

To contact a CCCS office, call 1(800) 388-2227.