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Reversing Your Debt Review Debit Order

You may be thinking about reversing a debit order for your debt review that just went off.

Let’s talk about what happens when you do this and why it will destroy your financial future.

Why Do Some People Reverse Their Debt Review Debit Orders?

When cash is tight some people stop their debt review payments by reversing the debit order that just went off at the end of the month. They do this to get quick access to that money.

This might happen because they need cash for a sudden emergency or feel tempted to spend that money on something else that seems urgent. This might be to fix a car or repair a household appliance. It might be to help a family member or cover an expense related to their kids schooling.

At first, this can seem like an easy way to solve a short-term cash flow problem, but this choice can cause big trouble. In the past the person may have missed lots of payments to different credit providers and things were not so bad. But debt review is designed to help people slowly get out of debt, and skipping payments totally messes up the plan.

What Happens When You Reverse a Debt Review Debit Order?

If you are able to query a payment and have it reversed through your bank you will get some money back into your account and can then spend it. So, short term this will seem like a win.

But when a debt review debit order is reversed, the money that has been promised to your credit providers doesn’t reach the people you owe. The banks and other credit providers will immediately be notified by their computer accounting software and investigate why.  This means your debt review agreement immediately starts to fall apart.

Most people in debt review have a court order that requires monthly payments. The amount each month is specifically mentioned in the court order. So, if you miss a payment, you break the requirements of the court order.  Creditors might think you’ve stopped trying to pay them, and they can then freely cancel the agreement.

Once that happens, they can take legal action, like repossessing your car or home. All those collections calls, sms, emails and scary letters will begin again. Say goodbye to peace and quiet. Say goodbye to sleeping well at night.

Even more devastating is that your debts will revert to the old calculations from before your debt review. Because the credit providers rework those calculations your debt balances will likely shoot up and you will suddenly be shocked by all the interest and fees the bank will add to the debt. And now you will have to try start paying it off all over again (less the amounts you paid so long during debt review) but the balances will be sky high.

So, you can see that missing even one payment can put you deeper in debt and make it harder to ever fix your finances.

Why a Debt Review Debit Order Reversal Is Such a Bad Idea

Stopping a debt review payment is dangerous because it removes all the protection you had against creditors. It effectively blows up your debt review, lets the banks start new legal action against you and puts your assets at risk of being repossessed or sold on auction.

And if you later try to get things back in place they can just ignore you or tell a judge that you have broken your debt review arrangement so can’t be trusted any more. It shows you are not serious about paying off your debts. So even if you get an attorney to try to defend your case you will probably lose the case and have to then pay the bank’s legal fees and your debts.

A Much Better Idea Than Reversing Your Debt Review Debit Order

So, if you are experiencing a sudden financial emergency or thinking about reversing your debt review debit order what should you rather do?

Instead of reversing a payment, it’s so much better to just talk to your Debt Counsellor if you’re struggling. They can help you find another solution.

‘talk to your Debt Counsellor if you’re struggling. They can help you find another solution’

If you give your Debt Counsellor some time, they can even talk to all your credit providers about your emergency and find ways to try adjust payments and your payment plan. They might be able to offer you suggestions on short term solutions to your problem that leave your debt review intact and protect all the progress you have made.

If you are struggling to make ends meet, they can even talk to the FoodBank and see if you qualify for free food packs to offer some financial relief.  There are more options than you may realise and they may work much better than cancelling a payment that’s already been made.

So, never reverse a debt review debit order. Rather talk to your Debt Counsellor and find better solutions that keep you and your family legally protected.