The debt management Fantasy;

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The debt management Fantasy;

Sunday, September 28th, 2008    Subscribe To Our Feed

The credit counselling Fantasy;

financial counselling in Canada has become a common solution for dealing with debt but may not be the right methode for people to administer their debt. In a growing number of cases people will seek out consolidation loans to eliminate their credit card debt and start with a new slate. even though this takes care of the initial problem it constantly developes greater circumstances later on in life. The reasons why this happens are;.

First of all, Canadian’s are creatures of habit. By a consolidation loan you’re only covering up the vital issue, your habits. Although a debt consolidation loan will repay your initial debt it doesn’t deal with your spending habits. Usually individuals obtaining consolidation loans to eliminate their debt end up in twice the debt they started with.

This being the second reason consolidation loans don’t work. After individuals pay off their credit cards or lines of credit it allows them access to available funds, allowing the process to start over again. Often times people wind up with their un-secured debt maxed out again, as well as, the consolidation loan that they took out in the first place. The most generic comment I hear as a financial counsellor is “I have to obtain a debt consolidation loan to re-pay my debt”, “I do not want to use credit cards again”. In theory this is fabulous but usually this doesn’t happen

Unless an individual is prepared to tackle their overall problem (i.e. their spending habits) they will not succeed with a debt consolidation loan. In actual fact this is one of the main reasons that the banks have stopped issuing debt consolidation loans. They have, for the most part, stopped this because they recognise that this is only feeding the problem and not solving the problem. If you truly want to deal with your debt, cut up your credit cards, stop access to any revolving credit, make your monthly payments to pay the debt down and track your spending. It is only through the tracking of your spending habits that you will truly understand the fundamental issues of your debt. In order to deal with your debt problems, you must first understand how you got there in the first place.

If you want to live debt free you must recognise your unnecessary spending habits and make changes to eliminate them from your life. If you were to ask me what lesson I teach my clients the most, it’s how to track their spending and identify unnecessary spending.  

Greg Martin
Credit Counsellor
Phoenix Credit and Debt Counsellors

 Debt Consolidation Canada