Jan 16, 2008
Most people realise that you can't borrow your way out of a bad debt problem however ironically this is exactly what people with debt problems automatically seem to want to do. This course of action is unfortunate as debt problems can only be dealt with effectively if a person understands clearly what the position of their actual financial situation is.
One of the key drivers for people experiencing debt issues and wishing to take out a bad debt loan is to avoid impacting on their credit rating with the Irish Credit Bureau (ICB) However, if you stop and think about this seemingly sensible judgment in the cold light of day a persons desire to maintain a good credit rating at all costs can be a very dangerous course of action. If a persons financial situation is such that credit and debt commitments are simply unsustainable in terms of maintaining contractual debt repayments on loans and credit cards then that is the time to stop any further lending in the form of consolidation loans or other credit facilities.
Taking on a credit consolidation loan simply to wrap up other bad debts into a single loan payment may sound like an ideal debt management solution but the reality of many loans taken out to deal with a bad credit situation is that the new repayment commitment is also simply not practically affordable.
Resources: http://myvesta.ie |
