Bill Consolidation: Pros, Cons & How It Works

Staying on top of your bills is extremely important. Aside from helping you to avoid accumulating debt and overdue bills, properly managing what you owe has consequences on your credit rating. Many people find this difficult, which is understandable when you have bills coming in from all different directions at all different times! A great way to help yourself stay organized and more easily manage what you owe is by consolidating your bills. Read on for everything you need about bill consolidation.


Bill consolidation is most commonly done through either debt-related or overdue bill-related consolidation. The general idea is the same, which is that you are able to combine outstanding amounts that you owe into a single balance that can be paid all in one or paid down over time.

Debt-Related Bill Consolidation

This type of bill consolidation commonly occurs with credit or store cards. If you have several credit cards, these may be difficult to manage, especially if payments are due at varying times throughout the month. A debt consolidation loan allows you to combine all of your card payments into one aggregate payment or loan. Another option is to do a credit card balance transfer, which moves all of your outstanding balances onto one new card, likely with an extended payoff period and potentially variable interest rates.

Importantly, however, creditors are not always willing to let you consolidate debt-related bills, and even if they do, you must have good enough credit to receive financing. Also, some loans like auto or mortgage loans cannot be consolidated in this way.

Non Debt-Related Bill Consolidation

This type of bill consolidation commonly occurs with overdue, company-specific bills like utilities or Internet. If you have a multitude of overdue bills, you may be able to consolidate your past due balances into single monthly payments. Utilities and other companies might even be willing to reduce the aggregate amount of your past due balances since it is in their interest to try to recoup at least some of the money you owe.

This, however, will ultimately be at the discretion of the utilities company / others issuing your bills, and they may not always be willing to let you consolidate what you owe. Plus, certain overdue bills like rental bills cannot be consolidated in this way.


Though it is a less common type of bill consolidation, you may be required to pay money due to an unfavorable legal judgment. This could be the case in various civil matters, divorces, or anything else that results in you taking on a significant monetary liability. In some cases, you can combine the total amount you owe and arrange monthly payments. This will depend on whether or not there is a repayment directive from the court and / or if the opposing parties agree to the terms. Be sure to check the rules with your lawyer or other representation before pursuing this option.


As you can see, bill consolidation is a great tool to help with organization and to make outstanding debt or overdue bills significantly more manageable. The decision of whether or not to consolidate ultimately depends on the specifics of your scenario, and sometimes bill consolidation may or may not be the most advantageous option. So be sure to think through your options and consider pursuing professional guidance to help you decide what is best.