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Credit counselling has become a trendy method of handling debt but may not be the right solution for individuals to handle their debt. In most cases individuals will seek out consolidation loans to control their unsecured debt and start with a clean slate. even though this takes care of the momentary problem it frequently creates greater issues later on in life. There are two reasons why this happens.

First of all, individuals are creatures of habit. By applying for a consolidation loan you are only masking the original problem, your habits. Although a debt consolidation loan will pay off your original debt it does not deal with your spending habits. Commonly individuals getting debt consolidation loans to eliminate their debt end up with twice the debt they started with.

This being the other reason debt consolidation loans will not work. Once individuals eliminate their debts it allows them freedom to available funds, causing the process to repeat itself again. Often times individuals end up with their debts maxed out again, as well as, the debt consolidation loan that they took out to pay off their debt. The most routine statement I hear as a debt manager is “I need to receive a debt consolidation loan to repay my debt”, “I dont want to use credit cards again”. In theory this is fabulous but often times doesn’t happen

Greg Martin
Financial Counsellor
Phoenix Credit and Debt Counsellors
Debt Consolidation Canada