What is the debt review process?
Debt review is the process of assessing a person’s financial situation. It provides the client with recommendations on how to manage their debt effectively.
The process includes negotiating with creditors to reduce interest rates or monthly payments. It can be done by consolidating debts or developing a budget to help repay the debt in a way the client can afford it.
Why can the debt review process be a good option?
It can benefit those struggling to make ends meet each month. Or help those who have fallen behind on their payments.
It can help them get back on track and avoid further financial difficulties.
However, the debt review process is not a quick fix to your financial problems. It takes time to reach the end of your debt struggles and commitment to make sure you pay every month that is agreed to.
How does the debt review process work?
The debt review process is a legal step you take
The debt review process is a legal process that helps over-indebted consumers to repay their debts in a more manageable way.
When does the process start?
A debt counsellor will assess your financial situation. They will then work out a repayment plan that suits your financial circumstances.
The debt counsellor will then present it to your creditors, who must agree to it before it can be put in place.
What happens when the plan is approved and in place?
You will make one monthly payment to the debt counsellor. The counsellor will then distribute the funds to your creditors.
What happens if you default or something happens?
If you default on the repayment plan, or if your financial situation changes, you may be able to apply for an amendment to the plan. Talk to your debt counsellor, they are there to assist you all the way on your journey to a debt-free life.
There are various companies you can apply for debt management like NDA, CreditSmart, Debt Expert.
Conclusion
The aim of the debt review process is to help you become debt-free within a few years while having enough to go on with your daily life. The duration is usually 60 months, but it depends on each person’s financial situation.
If you are struggling with debt, the debt review process could help you get back on track. It is something to consider when you do not see another way out of your financial struggle.
There are pros and cons to debt review, visit our debt review page to find out more or simply go to our home page.
