May 23, 2023

What is Debt Review, and is it a good idea?

what is debt review

If you’re struggling to cope with your debt, you need to know what Debt Review is, both the positive and negative aspects. However, for someone struggling with debt, it is undoubtedly one of the safest options.

With loan consolidation, careful budgeting, self-discipline and other options available to get rid of debt, choosing what works best for you might be hard. In this article, we’ll look at why – and when – going under Debt Review is the best idea to clear debt from your name. 

Why Debt Review is a good option to get rid of Debt

If you are over-indebted (in a position where you owe more than you can earn consistently), Debt Review is one of the best options to work on clearing it. This is because it is a process through accredited service providers, like Debtline, who work with and support you while you work towards financial wellness.

Through Debt Review, you work hand-in-hand with a debt counsellor to communicate with creditors and negotiate your interest rates initially. From there, you work monthly to pay off what you owe in a way you can afford. 

What are the key benefits of Debt Review?

1. You work with a monthly payment plan that suits you

Your debt counsellor will work hard to build a monthly budget that suits your lifestyle. This entails them negotiating with your creditors to reduce the monthly interest rates on what you owe. 

As part of your repayment structure, your repayments will be consolidated into one monthly plan. The benefit of this is that you don’t need to worry about working multiple payments into your budget, and you don’t need to be concerned about forgetting one or two of the smaller repayments. The monthly amount will also include any legal fees, Debt Review costs and repayment interest rates.

2. Your assets will be safe from repossession

When you’re under Debt Review, your car, your home, and your other assets will be protected under the regulation of the National Credit Act. If you stay current with your Debt Review repayments, creditors cannot repossess your assets.

Read: Car repossession rules while under debt review

3. You will be safe from creditor calls

Under Debt Review, your creditors will be legally obliged to call your debt counsellor, and they cannot contact you demanding payment. This means you’ll have relief from any credit providers hounding you, and you can trust that your counsellor will be on your side to communicate with them on your behalf. 

Things to know about Debt Review

1. You won’t be able to take on any more credit

Entering into Debt Review means you want to get debt out of your life. As a result, you agree to pay off your debt – and not take on any extra credit during the process. Your credit record will show that you are under Debt Review, and you will be automatically disqualified if you apply for any credit loans. The great news is that once you have completed the process, you will receive a Clearance Certificate, and then you can apply for credit.

2. It might take a little longer to pay off your debt

Because of the affordable lower monthly repayments, paying off your debt might take a little longer. Despite this, the monthly plan is structured by your debt counsellor so that it won’t be a massive lifestyle change for you to pay off your debt.

For more information about Debt Review, don’t hesitate to give us a call or fill out a free assessment and let’s get you on your way to a debt-free life!