Why Consolidating Your Debt Works

debt consolidationThere are many situations in life that can lead to bad credit, but the good news is that there is help! You shouldn’t have to be banished to poor credit forever, and here we’re going to discuss why debt consolidation works. The important thing to understand about Canada debt consolidation is that is not a one size fits all solution; without consumer credit counselling services your chances for staying debt free are diminished greatly. While debt consolidation will help you clear out the bed debts, if you don’t learn to use credit wisely you’ll never escape the debt trap.

What is Debt Consolidation?

Consolidation is just a means to an end. You’ll be able to take all of your existing bills and roll them together to get a single monthly payment, an interest rate you can live with and finally an end date to your debt. Some debts may end up taking a little longer to pay off than if you had paid the minimum payment, but then again you wouldn’t be able to negotiate your monthly payment down either.

Who Can Consolidate Debts?

Anyone can virtually do it, and you don’t need a debt consolidation company to act on your behalf either. It does help though; dealing with Canadian debt can be tricky and you want a professional on your side to help you through the process. The key to getting a good deal is having a good negotiator. Your debt consolidation specialist should have an extensive knowledge of the credit system and be able to help you understand your rights and obligations as a borrower. The last thing you want to do is to work with a Canadian debt consolidation specialist who doesn’t have much experience.

Is Debt Consolidation Hard?

It can be, depending on your situation. The hardest part of the process is gathering up your debts and reviewing your credit report. You’ll have to work with the consolidator to find erroneous or false information on your credit report and put a note on the file. You’ll have to find all of your debts and then decide if you want to pay them off or not. Debt consolidation only truly works when you’re paying down all of your debts. If you still have debts outstanding at the end of the process you could wind up in the same situation that you started with.

Is Debt Consolidation Right for You?

Debt consolidation will work on virtually any kind of debt, but it doesn’t work all on its own. You will need to get consumer credit counselling services to ensure that you don’t end up in a pit of debt again. This will help you understand how to avoid bad credit behaviours and how to start building credit for the future. You won’t be able to get a mortgage (first or second mortgage) unless you can prove that you’re working on your finances. If you would like more information about debt consolidation, contact us!

Contact us today and see what we can do for you.