What is better - Contacting a counseling agency, settlement company or consolidation company?

In a counseling agency, counselors conduct 30 to 40 mins interview to gather information about your financial status. Based on that, they usually suggest you to go for either debt consolidation or debt settlement. My suggestion would be checking your financial status by yourself only. If you are able to make full payments but at a reduced APR, you can go ahead for debt consolidation. And if you are out of funds and need a reduction of your total outstanding balance, you can opt for debt settlement. And let me tell you, whatever debt relief program you choose, a genuine consolidation or settlement company has counselors to guide you through the entire process. So, you can certainly save some dollars which you could have spent for consulting credit counselors separately.

I assume that you're in debt. Otherwise, wouldn't have asked this question. Now, if you're in debt, then please do tell us if you have unsecured debts or secured. Debt consolidation or settlement won't be of any use if you have secured debts. Now, if you have unsecured debts, then I would suggest you to take a few steps before thinking about credit counseling, debt consolidation or settlement:

Check the validity of the debt
Check the SOL period on the debt
Check how much you can afford to pay

Actually, it depends on your financial situation and your debt situation which option will suit you the best. If you're not sure about consolidation and settlement, which option to choose, you can at first go to the counseling, where a counselor can help you decide your suitable option. If you have multiple debts and can't negotiate with your creditors on your own, you can take professional help to consolidate or settle your debts.

If you are totally in financial distress condition, then you should seek help from a counselling agency. If you know you can manage a consolidation loan but managing multiple loans is difficult to manage, the take out a consolidation loan. And, if you know that you can't repay the total debts, then you should go for settlement.

I agree. If your debt is beyond your ability to pay then seek out a consolidation loan company, but make sure the company you're reaching out to does not require you to pay for their services. If they're reputable, then there's no charge. There are too many companies out there who don't really care about helping but are in it for the money. You should also check to see what their BBB rating is and I would recommend dealing with one who is accredited by them.