What Happens When I Go Under Debt Review?

When you go under Debt Review, several steps are initiated to ensure your financial situation is managed effectively and legally. Here is a detailed overview of the process:

1. Notification to Credit Bureaus and Credit Providers

Once you apply for Debt Review and your application is accepted, all relevant credit bureaus and your credit providers are notified. They then flag your profile as ‘under debt review’. This flag indicates to potential creditors that you are currently managing your debt through a regulated process and cannot take on additional credit. However, upon successfully completing the Debt Review program, you will be able to obtain credit again, enabling you to rebuild your financial standing.

2. Debt Repayment Plan:

   – Your Debt Counsellor conducts a thorough assessment of your financial situation, including your income, expenses, and outstanding debts. Based on this assessment, they create a tailored repayment plan that is affordable for you and sustainable over time. This plan is then negotiated with your creditors to reduce interest rates and extend repayment terms as needed.

3. Legal Protection:

   – While you are under debt review, you receive legal protection from your creditors. This means creditors cannot take legal action against you or seize your assets, providing you with peace of mind and the space to focus on repaying your debts.

4. Regular Payments:

   – You will make regular payments according to the agreed-upon repayment plan. These payments are distributed to your creditors as per the plan, ensuring that your debt is gradually reduced over time.

5. Completion and Clearance Certificate:

   – Once you have completed the Debt Review process and all your debts are fully paid off, you will be issued a clearance certificate. This certificate is a formal declaration that you have settled all your debts and are no longer under debt review.

6. Updating Credit Bureaus:

   – After issuing the clearance certificate, your Debt Counsellor will notify the credit bureaus that you have successfully settled your debts. Your credit profile will be updated to reflect this, removing the ‘under debt review’ flag. This process helps in restoring your credit status, making it possible for you to apply for new credit in the future.

Going under Debt Review involves notifying credit bureaus and credit providers, developing and adhering to a structured repayment plan, and receiving legal protection from creditor actions. Upon completion, you receive a clearance certificate, and your credit profile is updated to show that your debts have been settled. This comprehensive process ensures that you can manage and repay your debts in a controlled and protected manner, ultimately leading to financial recovery and stability.