The Debt Consolidation Story

Financial advice in Canada has become an accepted method for dealing with debt, but could not correct route for individuals to control their debt. In a growing number of cases individuals will seek out debt consolidation loans in order to verify their un secured debt and start a new slate. Although this takes care of the original problem, it typically causes major event down the road. The reasons for this happening is. 

First and foremost individuals, creatures of habit. By getting a consolidation loan you only covers up the ultimate question. Your habits Although a debt consolidation loan to clear your original debt does not concern itself with your spending habits. Usually people who apply for debt consolidation loans to pay their debt end up with twice the debt they started with. 

This is the other reason debt consolidation loan does not work. When Canadian wages from their credit cards or lines of credit it gives them access to the resources available, so the question to start over again. Often times people wind up with their un-secured debt maxed again and, consolidation loans, they were issued in the first place. The most frequent statement we hear as a financial advisor "We have to reach a consolidation loan to re-pay my debt", "i dont want to use unsecured debt again." In theory it's great, but usually this is done not 

Unless a person is ready to tackle their main problem (ie, their spending habits), they will not succeed with a debt consolidation loan. In reality, this is one of the main reasons that banks have stopped issuing debt consolidation loans. They have mostly stopped this because they recognize that this is only feeding the problem and not solve the problem. If you really want to deal with your debts, cut your credit card, stop access to all of revolving credit, making your monthly payments to pay down debt and keep track of your expenses. It is only through tracking your spending habits, you will really understand the basic questions about your debt. To solve your debt problems, you must first understand how you got there first. 

If you want to live debt free you must recognize your unnecessary spending habits and make changes to remove them from your life. If you were to ask me what lesson we teach my clients the most, it's how to track their costs and identifying unnecessary expenses.