Debt review is a financial program that provides help and relief to debtors who are struggling to make ends meet. It is designed to assist you in repaying your smaller debts in a timely manner. However, debt review is not for everyone. If you are in over your head with credit cards, store cards, loans and other forms of unsecured debt, a debt review can help you get your finances in order.
For many, the thought of applying for a debt review can be unnerving. This is why it is important to work with a reputable debt counsellor who can guide you through the process. Aside from determining whether or not you are over your head, your debt counsellor can help you create a payment plan that works for you.
The first step in a debt review is to fill out Form 16. In addition to providing details about your accounts, you should also include an explanation of why you are unable to pay your current balance. Your creditor will respond to your proposal within a few days. Creditors do not have to agree to your proposals, but they may make counter-proposals.
Aside from a reasonable bond arrangement, your debt counsellor should also help you negotiate a fair and equitable outcome. This can be done by notifying your creditors of your new circumstances and suggesting possible adjustments. Having a court order in place will mean that creditors will no longer be able to force you to pay them in arrears.
Another option is to seek help from the National Credit Regulator. This is a government agency that helps consumers deal with creditors. While this option is more expensive, it can also save you from a debt review. Taking the assistance of a financial professional can prevent you from making the wrong decisions.
As with any other financial program, your debt counselor will make sure that you know what to expect. They will conduct a thorough evaluation of your current financial situation, and then recommend the best course of action. These may involve applying for a loan, using a credit card, or attempting to settle your debts with your creditors.
While a debt review is an excellent way to get your finances in order, it comes with a number of pitfalls. Not only do you lose your cash, you also have to take on a new set of creditors and must ensure that you are making timely payments to all of them. If you fail to comply, you could find yourself nullifying your entire debt repayment plan. You should also keep in mind that you cannot use store cards or apply for more credit while you are under a debt review.
In order to be effective, the most efficient debt review system will have to be implemented in a systematic manner. To do this, you will need a debt counsellor who can assess your finances, identify your debts, and provide you with a well-crafted payment plan.