Credit Counselling in Canada ;
debt management in Canada has become a reasonable method of handling debt but might not be the appropriate route for individuals to handle their debt. In a growing number of cases individuals will look for consolidation loans to control their un secured debt and begin with a clean slate. even though this takes care of the momentary problem it routinely causes bigger issues . There are two reasons why this happens.
First off, individuals are creatures of habit. By getting a consolidation loan you are only masking the ultimate problem, your habits. Although a debt consolidation loan will clear your original debt it doesn’t deal with your spending habits. Usually People getting debt consolidation loans to pay off their debt end up in twice the debt they began with.
This is the other reason debt consolidation loans won’t pan out. Once individuals pay off their debts it gives them access to available debt, causing the trap to start over again. Often times individuals wind up with their un-secured debt at the limits again, as well as, the debt consolidation loan that they took out to eliminate their debt. The most frequent comment I hear as a financial counsellor is “I need to acquire a debt consolidation loan to repay my debt”, “I dont want to use unsecured debt again”. In theory this is terrific 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
Financial Counsellor
Phoenix Credit and Debt Counsellors
Credit Counselling Canada
