September 29th, 2008 at 11:49pm
Under Bankruptcy
The debt management Fantasy;
debt management in Canada has become a trendy method of dealing with debt but might not be the appropriate solution for individuals to control their debt. In most cases clients will apply for consolidation loans to eliminate their debt and start with a clean slate. even though this takes care of the initial problem it typically causes greater problems down the road. The reasons why this happens are;.
First off, individuals are creatures of habit. By applying for a consolidation loan you’re only masking the vital issue, your habits. Although a consolidation loan will repay your initial debt it does not deal with your spending habits. Generally speaking People applying for consolidation loans to pay off their debt end up with twice the debt they started with.
This is the other reason debt consolidation loans will not pan out. Once Canadian’s eliminate their debts it gives them access to unsecured debt, allowing the process to repeat itself again. Often times Canadian’s wind up with their un-secured debt maxed out again, as well as, the consolidation loan that they borrowed to pay off their debt. The most common statement I hear as a credit counsellor is “I have to secure a consolidation loan to repay my debt”, “I do not want to use credit cards 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
Debt Manager
Phoenix Credit and Debt Counsellors
Debt Consolidation Canada
By writer
September 24th, 2008 at 10:04pm
Under Credit
Negotiating Credit Card Debt
Sure, we all love them but when misused, a credit card can break us. Too often, there is no self-control associated with credit card use, which means you are quickly in debt and then losing sleep over it. If you are tired of being drug down by credit card debt, we have good news. Credit card debt assistance services are offered throughout the country, providing services online and in person. Although not every company is honest, the Federal Trade Commission or FTC has developed a number of safety guidelines that help consumers choose a reputable company.
What to Look for in a Scam
Just as there are many different options of credit cards, you will find as many, if not more debt reduction companies to match. When looking for a service to help you, make sure they follow federal laws. Most importantly, if a company makes outlandish promises, you should be suspicious. These companies should have one goal in mind teaching you better money management for life, not using various services to fix the problem temporarily. Therefore, if you read advertisements for quick fixes, rather than financial education, beware. Some of the more common statements made associated with a scam include the following:
Repair your credit ” 100% guaranteed (this is impossible) Get a new credit identity (this is illegal) Get all bankruptcies, low credit scores and liens from your credit file eliminated (ditto) No credit problem to bad for us to fix (this means they are stupid)
To help get rid of your debt by credit card, credit repair services are required by federal law to let you know of what actions you can undertake for free. For example, if they insist that you have to pay to get your own credit report, get up and leave.
All you have to do to get a copy of your reports from Experian, Equifax, and TransUnion is to request one in writing, fill out an online form, or call them on the phone. Now, if you want to find your credit score, which is different from the credit report, you would typically be charged a small fee.
Understanding the Credit Repair Organizations Act
Just like credit cards, credit repair services are big business. The FTC regulates them firmly. And, for your protection, there is such a federal law called The Credit Repair Organizations Act, which you should be aware of. All debt reduction services are required to let you know your rights BEFORE you pay any fees.
In addition, these companies are not allowed to charge you until all of the work is done. Therefore, if any false claims are made regarding the services offered, you have the responsibility to let the FTC know. After all, this would be illegal action on the part of the debt reduction company.
By writer