What Are The Advantages of Debt Review?
If you are considering debt review, you are probably wondering: what are some of the advantages of entering debt review and how will it help me?
Here are some of the most immediate benefits to being in debt review:
Protecting your assets
No more scary collections calls & letters
One manageable payment amount
Amazing concessions from your credit providers
Reckless Lending Investigations
Afford the essentials without relying on credit
Let’s take a look at each of those benefits, and discuss how entering debt review will help you to improve your financial future.
Protecting Your Assets
When you are struggling to make debt repayments, a credit provider can decide to try and repossess an asset that they have financed.
This can result in legal action against you, judgements on your credit record and having the asset (like a car or house) sold on auction. If the asset is sold for less than you owe, you might end up not only losing the asset, but also paying off the rest of the debt, long after your car or house is sold to someone else.
If you enter debt review before your credit providers start legal action against you, then you will be able to include debt repayments to your car or home and this protects you from losing them.
As long as you make the agreed payments, as set out in your court order, your credit providers will not bother you. Even if they do, you can always defend any new legal action by referring the court to your existing debt review court order and your payments.
No More Scary Collections Calls & Letters
Once you start debt review, all your credit providers are notified that you are now going to be making payment via debt review.
They will all receive written proposals and be sent the court order once it is granted.
This means they don’t have to have their collections people chase you, since your Debt Counsellor will be chasing them to agree to the new plan, and stick to the court order.
This means that you will seldom, if ever get another scary collections call or letter once the process is underway. Even if someone does call, don’t stress, just refer them to your Debt Counsellor. Your Debt Counsellor, and attorneys for the debt review, can handle all of that stress and you can stress less.
Eventually, you won’t even be scared of answering calls from unknown numbers.
One Payment Amount
If you make use of one of the four NCR registered Payment Distribution Agents while in debt review, paying your debts each month becomes even easier.
Rather than lots of different repayment amounts, to lots of different accounts, with lots of debit orders, you can essentially consolidate multiple payments into one simple payment. No need for a new loan or even more credit to pay off existing credit. Rather, make one payment to reduce all your debts each month.
With the help of a PDA you make one payment of the agreed amount that covers all your debts each month, and the PDA does all the work of splitting up your repayment into the right amounts every month to the right accounts, using the right reference numbers. It is simple and easy.
Amazing Concessions from your Credit Providers
All the major banks and credit providers regularly offer amazing concessions to consumers who agree to repay them regularly through debt review. Most times, this will include accepting smaller payments over a longer time period.
Most credit providers also agree to drop monthly account fees, annual charges and even lower interest rates.
All this is negotiated with your credit providers, but in almost every case you will save drastically on these additional concessions alone.
Credit providers make these concessions to help you repay the debt in a reasonable time period and expect you to stick to the program in order to get these benefits.
Reckless Lending Investigations
When you begin the process, you can ask your Debt Counsellor to check if you have been given credit you should not have been.
This is a reckless credit investigation.
If any such credit is found, the Debt Counsellor may ask the court to decide if you still have to repay the credit, or if this account should be paid last, freeing up funds to settle other debts faster.
Afford the Essentials Without Relying on Credit
If you have been struggling to make ends meet, then you have probably fallen into a downward spiral of needing to use your credit to repay existing credit and pay for your monthly living costs.
We all know this is a bad idea and hurts us in the long run, but it can be hard to break that cycle.
The good news is that when you enter debt review, you will work with your Debt Counsellor to figure out what you realistically need to spend on things like groceries, electricity, communication and transport. All these things will be worked into your budget so that you no longer need to use credit to pay for them. Instead, you can start living a cash lifestyle that will save you thousands over time.
‘these things will be worked into your budget so that you no longer need to use credit to pay for them’
Once your Debt Counsellor and you know your monthly budget figure, the remaining funds get allocated towards repaying your debts as speedily and realistically as possible.
During your debt review, you stop relying on credit. This is a massive, positive change in your life. You learn to budget and make regular debt repayments. This way, each month you end up having less and less debt, instead of being trapped in an ever worsening debt spiral.
You break the chains and stress that debt has brought to your life.
Curious about the possible down side of entering debt review?
Check out our following article for info on how debt review does force you to make some big adjustments.