Debt consolidation really can work for some people to help them get out of debt and stay out of debt. But debt consolidation can be a disaster for other people. Maybe you’ve even heard these stories. Decent well-meaning people sign up for debt consolidation and find themselves in worse financial troubles two years later. How can this happen?

Actually, it can happen very easily. You have to use debt consolidation very carefully and with discipline for it to work. If you treat it lightly and don’t address your total debt problem, it can’t work. But there can also be extreme situations where debt consolidation just doesn’t will not be the answer. Here are some scenarios we know of.

You have a spending problem.

Interestingly, this is not the most common debt consolidation disaster, but it is probably the most avoidable. If you live in a big house, take elaborate and frequent vacations, entertain lavishly, party like the Hilton sisters, and have purchased some new article of clothing in the past 48 hours, you need to look at your lifestyle. You have to sync up your income with your outgo, and believe it or not, you have more control over your outgo. Think about what you spend.

If you use a debt consolidation plan but just bought your 16-year-old son an SUV for his birthday, treated yourself a sapphire tennis bracelet for fun, and your Chihuahua is seeing a doggy therapist, you won’t get out of debt unless you (a) increase your income or (b) change your attitude. For most of us, option B is the only practical one.

You don’t make enough money.

Debt consolidation disasters can also occur when you don’t bring in enough money to make ends meet. The big question is: how much is enough?

If you’re head over heels in debt and don’t have a job, you need to find work and start getting a paycheck. If your situation doesn't permit a full-time job, get creative. Maybe you can figure out how to make that work anyway. Full-time jobs don't have to be convenient. You may also be able to work part-time or freelance.

If you’re working but are not getting paid as well as you would like, you need to think long and hard about that. If you have solid job skills, you should polish up your resume and start looking for work. Nowadays so much of the job search process can be done online that it isn’t necessarily very time consuming or difficult to make some inquiries.

If you don’t have the skills necessary to get a better-paying job, you should think about how to get them. For instance, if you have a high school diploma but no degree, you might consider your local college or an online degree. Vocational training can also open doors to better-paying work.

Don't fall for schemes that promise you can "work at home" or "make millions online in a few hours a day." You'll wind up in even more debt. You need to figure out a way to start making money (not spending more). Even a part-time job at your local fast food joint will bring in something.

You or someone in your family is sick.

This is actually the number one cause of bankruptcy in America and it’s certainly a big reason for debt consolidation disasters. Every medical situation is unique, so you need to work with a certified credit counselor to plot your best course of action.

For instance, if you were in an accident and are anticipating a settlement at some point in the future, you need to find a way to juggle or hold off bills until your check arrives. This can be a very long time, and you probably need the services of an attorney as well as a credit counselor. For other people, there won't be a check coming in the mail. You need to figure out how to pay.

This can get somewhat tricky. In order to protect your credit, the best thing to do is to stay current on all non-medical bills. Then you should talk to your medical providers and explain the situation. The best approach is to meet with them and work out a plan whereby you pay them—the main negotiating point being the time frame. In other words, you're not fighting them about whether you'll pay, you're simply there to discuss logistics about how you can pay. You might not be able to pay $10,000 today, but if you had five years to pay that, it would not be a big problem. So you're working with them to shift the timeframe or other payment terms.

Medical bills are such a burden to so many people in catastrophic health situations that you won’t be the first person who ever approached a hospital and tried to work out a payment plan. In fact, your hospital may actually have somebody on staff whose job it is to work with people in your situation. If that's the case, take advantage of that special service. Hospitals want to get paid, so both you and the hospital have a real interest in finding a workable solution.

Unfortunately, medical bills can be complicated. You may have hospital bills as well as bills from individual physicians, clinics, labs, and other special services (ambulances) not to mention prescriptions. While you may be able to pay off some of the small bills, you should still contact all of these providers and explain your situation.

Debt consolidation in this situation involves rounding up those bills and consolidating them into one loan. This may or may not work; medical bills exceeding a million dollars are not unheard of. If you end up owing that much, talk to a certified credit counselor. Believe it or not, there are people who have climbed that mountain before! It can be done.

Prescription drugs can be a lot tougher to negotiate. Most pharmacies operate on a cash-and-carry basis, so if you can’t pay for your drugs in full, you probably won’t get them. If you can’t afford your drugs, go to your doctor. In some cases, the doctor may have sample drugs (from drug reps) that can buy you a little time. Don’t expect the doctor to give you a year’s worth of free pills. But every little bit helps! And sometimes you only need a short course of a particular drug, so even a few pills can help significantly.

Some people will tell you to try to buy your drugs in Canada or online. Although widely done, it’s illegal in many cases and definitely risky. Counterfeit drugs are a major problem worldwide and the problem is far worse outside the U.S. Bottom line? You may pay a discounted rate for pills with no active ingredients.

Instead, ask your doctor for what to do about your drugs. Many drug companies have assistance programs that help pay (or completely provide) drugs to certain people in financial and medical need. Your doctor may be able to put you in touch with them, but even if he can’t, find out the name of the drugs you need and search online. You’ll find out who manufactures the drugs. Use the “Contact Us” section on the website or a phone number to call and ask about drug assistance programs.

Generic drugs are another good alternative, but generics are not always available for all drugs. Your doctor may be able to recommend alternative drugs that do have generics for your particular condition, but he may not think to do that if you don’t ask him. Don’t be afraid to ask. Drugs are very expensive and doctors are very much aware of the fact that not everybody can afford them.

You are very educated.

Education is a wonderful thing, but most of us get there on a path paved by debt. Undergraduates may get by for a while without student loans (community college, parental assistance, part-time jobs) but if you made it to graduate school, you probably did not get there without some serious student loans, not to mention other debt.

College is a curious time for people because at the same time they are spending massive amounts of money on tuition, they have very little money for food, clothing, and entertainment. Throw in the need for wheels and an occasional plane ticket home and you can wind up with a whole lot of debt before you get your first job.

Educated people have many advantages in life, including the likelihood of getting good-paying jobs. But they are often exposed to a very rough financial start. Debt consolidation can work to round up all of those debts (student loans, car notes, credit card debts) into one payment.  Fortunately, a very educated person can often find a good job quickly, and with patience and persistence will be able to pay off their debts.

You are quite unusual.

Believe it or not, sometimes debt happens to people because of highly unusual circumstances, a unique situation, or maybe just a bizarre turn of events. Maybe you just launched a catering business and wound up with more expenses than you’d anticipated. You may have had to defend yourself in a complicated legal matter or gotten sued over something. Maybe a meteorite crashed into your house and you need long-term psychiatric care to deal with the trauma that your insurance company is unwilling to provide. These situations are not classic examples and usually take a credit counselor to help you sort out.

In conclusion, there are lots of ways that debt consolidation can fail. But for every one of these scenarios--the catastrophic illness, the unusual case, the spendthrift, the impoverished student, or the underemployed--there is also a way out. You can change your attitudes, change your lifestyle, and get creative to make things work out.

But be advised that if any of these situations describes your situation, a casual attitude about your debt problem and a lazy approach to debt consolidation will sink you! You  need to change things.

One last remark. These particular debt consolidation disaster scenarios do not mean that you're a bad person. A lot of us feel like any time we have to change our attitudes, learn something new, or figure out a solution to something it means that we are wrong and wrong is bad. Some of these situations may not be your fault at all. Some may technically be your fault, but they don't mean you're a total failure or a loser. They can just mean you're doing the wrong things but have figured out you have to make some adjustments.

Look at it this way. If you were driving you car across town to an address where you've never been before and you made a wrong term, you wouldn't keep going down that street for 100 miles and into the next state just because you refused to admit you took a wrong turn. Wrong turns happen. You would respond this way: as soon as you figured out you had taken a wrong turn, you'd take immediate steps to correct your course. If you start to speak and you say the wrong thing, you don't insist it's the right thing. You'd likely correct yourself and be done with it. If you go outside and your hair gets wind blown, you don't refuse to comb it ever again. You get the picture. We correct ourselves constantly, all day long.

If you're doing things that you need to do differently, do them. Get practical, get creative, get a certified credit counselor, get serious.

There is only one real debt consolidation disaster: refusing to change what isn't working for your financially.

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