The debt review process can sometimes be extensive and those under review cannot wait for the end. However, to understand what happens once debt review has been completed, it is necessary to properly understand what happens during the process and what it is all about. Debt review, or debt counselling, is designed to rehabilitate a person’s financial situation when they are overcome with debt. By signing up for debt counselling, a person is enlisting the help of a professional debt counsellor who will help manage debt payments. The counsellor will notify all credit providers and credit bureaus that their client is under debt review and arrange an affordable debt repayment schedule.
No credit during debt review
During the debt review process, the client is unable to take on additional credit. This allows their existing debt to be repaid faster according to a professionally laid-out plan, without adding more debt or using credit to pay off past debt which will keep the client in a debt-laden cycle. Because the client went under debt review, their creditors were notified, and it is considered unlawful reckless lending if they then allow you take out more credit with them. However, once the debt review process is over, all the client’s debt review flags will be removed from their profiles. The debt counsellors will send a clearance certificate to the National Credit Regulator (NCR), the credit bureau and the client’s credit providers. This means that they are free to take on credit again.
The hazards of coming out of debt review
When a client has completed their debt review process and successfully paid off all their debt, they are able to take on credit again. This is a double-edged blade, as it means that the client can do all things they did before that lead them into debt. Some people, when coming out of debt review, are cautious as they are afraid of getting back into debt, but others rush straight back into the credit cycle without consideration. It is important to practice responsible financial management and be aware of what could lead to debt. For more advice about debt review, contact One Debt today.