Ken and Daria Dolan, America's First Family of Personal Finance, answer your money questions every Friday.

Click here to ask Ken and Daria your question.

Here's the truth: Americans are drowning in debt. Consumers currently owe nearly $700 billion on all credit cards and carry, on average, more than $8,000 in credit card debt from month to month.

Now, here's the good news: This doesn't have to be you. If you're having trouble making payments, consolidating your debt may be the answer. Let's take a look at what exactly this means and how it could help erase your balances once and for all.

Dear Ken and Daria,

I have a high amount of debt and have been thinking about debt consolidation. Can you explain how this works, and how it affects my FICO score?

-Bruce

Are you up to your eyeballs in debt? Ken and Daria show you how to get outstanding balances under control with smart debt management strategies, only at Dolans.com.

Our man Abelicio Padilla has been blogging about his personal financial situation and he has been seeking advice for making sound money decisions. I wrote this piece as my input into his situation. If you'd like more background before you proceed, read Abelicio Padilla's interesting blog posts here.

Now here's my input:

It sounds like you have a plan Abe. However, I'd like you to think a little more about if you really want to sell that house. The market is down right now which means you probably won't get your best selling price for it. Also, did you consider that if you sell the house, you'll lose your mortgage interest deduction when you file your taxes? That deduction loss will cut into the monthly savings you expect to get by selling. Even though you won't notice it month to month, you'll feel it when you file your yearly income taxes. Consider also the upset that moving can cause. It's expensive. It will disrupt operations. In the long run It could cost you more than you think.

Debt consolidation sounds like a good thing to do, right? You've got all your credit cards lined up, and keeping track of the bills and their payment dates is no fun. How much do you pay on this card? What about that one? Did you miss the other one?

So consolidating that debt, either with a home equity loan or some other type of loan, seems like a great idea, right? You get one bill and your burden seems much lighter. But here's the problem: Many people don't have the self-discipline to stop using the credit cards that got them in trouble in the first place.

You start out by thinking you'll just charge the groceries this week and will be sure to pay off that bill. Then your car needs new brakes, and you weren't planning on that expense, so you get out the credit card again to help you in a pinch. But little things like this keep happening, and before you know it, you've got a few thousand dollars on the credit card.