Debt consolidation of some form can work for a number of people because it really does have different forms. Whether you do your own debt consolidation or have a company perform it for you, it can work. A problem, though, arises not from the approach itself, but from the people who are in need of the services.
Part of the problem comes from the lifestyle of living in debt for so many years. According to an article at Finance.Yahoo.com, the average American now has more than $9,300 in credit card debt. Of course, most of them did not get that kind of debt overnight. Instead, a habit was formed over the years that believed that having a lot of debt was OK.
The one important thing that will enable debt consolidation to work in a lasting way is the discipline of learning to say "No." This means evaluating all purchases before buying, paying for new purchases with cash, and paying off any current debt as quickly as you can. Then, once you have successfully reached debt elimination, you need to be willing to stay that way, with the possible exception of a mortgage and car payment.
Without this determination and looking at a consolidation of debt as a workable solution, it will end up being only a temporary solution. People need to understand that they arrived in the mess they are in – not just because of the economy (although that did put some in debt), but because of wanting debt and accepting it as part of life in the first place.
There needs to be a change of mind about debt. We do not need it to live. Get out of debt as quickly as you can and then enjoy the freedom it will give you. Establish a family budget and begin to get the real control over your money you need.