Bad Debt Management Methods to Avoid

Everything you need to know to get back on track.

Conventional wisdom says, if you find yourself in a difficult situation, stop what you are doing and find an alternative. There’s a popular quote by Will Rogers along the same lines: “When you find yourself in a hole, stop digging“. But when it comes to debt management this is exactly what some people do year after year.

Bad Debt Management

If you are unable to manage your debt properly, it can lead to health-related problems like stress, depression and anxiety. In addition, bad debt management can also lead to relationship challenges and marital woes. In many households, the arguments often linger on how much debt each spouse has and who’s responsible for it.

Mounting debt can also hurt your ability to budget and put aside something for a rainy day. Even if you are only paying interest because you have debt, it still means you have less money for other needs and wants. Plus, the higher the interest rate and the longer you take to pay off the debt, the more you’ll pay in the long run.

On the other hand, if you learn how to properly manage debt and pay it down quickly, it will help you become financially secure, enhance your standard of living and even improve your overall health and relationships.

Financial problems don’t usually happen all at once. Often debt tends to pile up a little at a time. Stop whatever you are doing that’s creating a deep hole. Decide what actions you are doing that contribute to the situation and change it. Awareness is the first step, taking action is the next.

Before anxiety and stress kick in, talk to one of our trained credit counsellors today. They can help you in managing your debt  by carefully analyzing and assessing your current financial situation. Call 1-888-294-3130 or contact us online through our online debt analysis and a counsellor will reach out to you shortly.

“If you are currently struggling with multiple debts and at your wits’ end, the solution could lie in bad debt management. In simple terms, it involves your choices on how you are managing your debt; is your debt increasing or decreasing rapidly?” says Jeff Schwartz, executive director of the Consolidated Credit Counseling Services of Canada.

Here are some bad debt management methods that you should avoid:


  • Live pay cheque to pay-cheque without knowing how much you owe to whom.
  • Ignore your monthly bill payments because you’re broke and can’t pay them. If you continue this way, you may even lose track of what you owe.
  • Overspend, creating more credit card debt, without changing your basic behaviour towards money.
  • Apply for credit to borrow your way out of debt. More credit means more debt, regardless of where you borrow it from.
  • Get a new credit card to pay off the debt on your old one. While using a balance transfer may be effective if you are lowering your interest rate, spending more by paying off one with another, is not.
  • Use an overdraft on your bank account to make the minimum payment on your credit card.
  • Shuffle payments back and forth depending on which account has some credit limit left.

Any or all of the above could actually put you into a dangerous cycle of never-ending debt. Here are a few useful ways to manage debt on your own. Start today and take charge.


  • Write down what you owe and to whom. Then prioritize your debts. Your accommodation and car payments should typically be at the top of the list.
  • Outline a budget and see how much money you can afford to pay towards your debts and bills. If you can at least pay what you owe each month, plus a little to reduce the outstanding balance, it would be a good start.
  • Track your spending for a month to see where you’re actually spending your money. You will likely be surprised to find out that you have more money to put towards bills than you thought.
  • Limit your credit cards and credit card usage. Another way to manage debt is to cut down on the number of credit cards you own. If possible, switch to a debit card as it restricts your spending and you can’t spend more than the amount you have in your account. It’s a great way to ensure you will not incur any more debt.
  • Get help from a qualified financial expert. A trained credit counsellor can help you understand your situation and guide you with customized debt consolidation options.

“Start today and you can initiate a plan to manage debt. Start by making a budget, controlling your spending habits, cutting down on non-essentials and carefully evaluating the value received on each dollar spent”, says Jeff Schwartz, Executive Director at Consolidated Credit Counseling Services of Canada.

Next steps – work with a trained credit counsellor.

Managing debt becomes easy when you work with a professional credit counselling and debt management company. If you are ready to make a positive change, now is the time to reach out to a trained credit counsellor. After completing a credit counselling assessment they will give you a better idea on how to go about managing your debt and helping you get out of the financial hole.

Ready to get started? Get in touch with any of our trained credit counsellors at 1-888-294-3130 or contact us online through our online debt analysis and a counsellor will reach out to you shortly.