What You Should Know About Debt Reviews

If you’ve ever applied for a loan, credit card or opened a credit account, chances are you’ve had your debt reviewed.

Debt reviews are also better known as debt counselling, which can best be described as a solution that is targeted towards consumers that have too much debt or are struggling to maintain a positive credit score by making the necessary payments on time.

Having your debt reviewed will prevent you from being placed under a magnifying glass such as with personnel administration. The entire process allows for you to follow guidelines that aids in your overall financial well-being.

What is a debt review?

A debt review is a process of having a debt counsellor assess an individual’s debt status. If the individual has any debt outstanding, a debt counsellor will notice it and implement a well-structured, appropriate repayment plan.

A repayment plan will be set up by, first of all, negotiating with credit providers and reducing interest rates. Debt counsellors will also try to negotiate the possibility of extending repayment terms.

If new, more attainable terms are agreed to, the counsellor will create a new restructured and affordable budget plan, as well as a payment plan, that will assist the client in settling his/her debt easily. This payment plan will allow the client to only have to make one payment per month to a payment distribution agency.

If someone is under debt review, they are automatically protected by a debt council, which prevents creditors from requesting payments from them.

Debt counsellors, in general, are held accountable for providing guidance to their clients through the process of debt review. Providing their clients with applicable and helpful financial advice is considered a top priority and working towards solving their debt problem is considered a priority. Debt counsellors not only work towards assessing the clients’ situation.

They also assist their clients to manage and budget their financial situation and not spend more than they can pay for. This will place emphasis on the importance of making payments, reduce the risk of getting into trouble with credit bureaus and essentially, help a client maintain a good credit score.