The credit counselling Fantasy;
financial counselling in Canada has become a trendy solution for dealing with debt but might not be the appropriate methode for individuals to control their debt. In a growing number of cases people will seek out debt consolidation loans to pay off their credit card debt and begin with a clean slate. even though this takes care of the momentary problem it oftentimes creates bigger circumstances down the road. The reasons why this happens are;.
First off, people are creatures of habit. By a consolidation loan you are only masking the essential issue, your habits. Although a debt consolidation loan will clear your original debt it wont deal with your spending habits. Commonly Canadian's getting debt consolidation loans to pay back their debt end up in twice the debt they started with.
This is the second reason debt consolidation loans will not work. After individuals pay back their revolving credit it gives them freedom to unsecured debt, causing the process to repeat itself again. Often times individuals end up with their credit at the limits again, as well as, the consolidation loan that they borrowed in the first place. The most generic comment I hear as a debt manager is "I want to attain a consolidation loan to pay off my debt", "I don't want to use revolving credit again". In theory this is terrific but often times 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
Debt Consolidator
Phoenix Credit and Debt Counsellors
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