Debt review can help you get back on track after a heavy load of debts. The debt review process will help you to organize and structure a manageable payment plan. To begin with, starting debt review with a qualified debt counsellor from Debt Restruct is an indicator that you are taking responsibility and control of your finances and that you’re interested in living a debt-free life.
Begin by finding out if you qualify for debt review and apply online. At Debt Restruct, we ensure the process is easy, quick and confidential. During the debt review process, we’ll help to negotiate better payment terms with your creditors. These new terms could significantly reduce your monthly repayments, making it much easier to pay off your debt.
Many applicants considering debt review are unclear about what will happen after the process, and a few popular misconceptions about debt review are to blame. Worry no more! After debt review, a better life awaits; we’ll explain what happens when you’re done with debt review.
Before understanding what happens after debt review, it is vital to know what happens during the debt counselling process and why you cannot take out additional credit while under counselling.
Debt Restruct will notify all credit providers and the credit bureau that you are now under debt review. After being informed of the change, your profile will indicate “under debt review”.
The key reason for the debt counselling process is to rehabilitate your financial situation and help you take care of your responsibilities while financing outstanding debts. Therefore, it is highly beneficial to stop the flow of credit so that you can focus on repaying what you owe. This is a necessary step since, unfortunately, if nothing prevents consumers from lending or making more credit, they tend to continue to make more debt.
Now, you might be wondering; what exactly happens to this status after the debt review process?
When you’re done, your debt counsellor will issue a clearance form notifying the credit bureau and the National Credit Regulator (NCR) that you have successfully paid off all of your debt and completed the debt review process.
The clearance certificate, also known as Form 19, is an indicator that you are officially debt-free.
The National Credit Act requires the credit bureau to remove the “under debt review” status from your credit profile within 21 business days of being informed you are no longer under debt review.
Now, if you are reading this and have a home loan and think that this means that you’ll have to undergo debt review for the next 20+ years, don’t worry. A home loan is a large sum of debt, and debt counsellors and credit providers understand that it takes a long time to repay.
So, you’ll be happy to hear that if you’ve repaid all of your debt, except for your home loan or mortgage, then you will also be eligible to have your Form-19, or clearance certificate, issued. You can be declared “debt-free” (so to speak) and continue to repay your home loan with newfound financial freedom and additional piece-of-mind.
If you have more questions, please don’t hesitate to contact our friendly team for answers.
Yes, if you’d like. You are free to borrow again and make purchases for a car or house under credit. However, it is essential to make sure you do not fall back into old habits and exhaust your repayable threshold once again. To some, the fact that they were once over-indebted is a good enough reason to be wary of unnecessary credit or lending. Others may rush straight into another credit process or get a new credit card. It is up to you.
With the rising cost of living, it can be tricky to take care of your daily responsibilities without incurring additional and sometimes unexpected expenses, resulting in more debt. Therefore, it is vital to draw up a monthly budget and constantly review it to ensure that you don’t become over-indebted again. Additionally, remember to save and invest your money to grow your income.
After the debt review, and a consistent payment record, you can continue to build your credit score even further; Allowing you to access more financial help from licensed credit providers for big purchases.
To maintain a good credit record, remember what caused the damage in the first place. Was it one unexpected incident or a series of more minor issues and missed payments for some period? Remember, going through the debt review process will help you get back on your feet.
When under debt review, your primary focus should be getting yourself out of debts. While you will be able to start up a business, you won’t have access to a business loan from a bank or any other registered credit providers whilst under debt review. In addition, setting up a business when you are over-indebted may result in cash flow problems in the long run and which lead to bankruptcy. Thus, it would be best if you focused on a business model that is less capital intensive and can grow as you do.
As we mentioned earlier, after a debt review, you’ll be free to borrow money to fuel your already growing business and finance your venture so that it may reach new heights.
Most people fear that debt review will remain on their credit record indefinitely. Others also worry that it will affect their credit score. Payment history is the most critical determinant of your credit score. In other words, if you miss a payment, your credit score is negatively affected. Conversely, if you consistently make your debt repayments on time, it could positively affect your credit profile.
As a result, many credit providers consider being under debt review a good thing.
The good news is that debt review does not remain permanently on your credit record. Once you have entirely paid out your debts and your clearance certificate is issued, the status will be removed from your history and won’t affect any of your future financial projects.
Find out if you’re eligible to reduce your debt and protect your belongings.
Disclaimer: This website and any information herein is not intended to be, nor does it constitute, financial, tax, legal, investment, credit, or other advice. Before making any decision or taking any action regarding your finances, you should consult a qualified professional directly.