Dealing with out-of-control debt can feel like a fight you just can’t win.
Many people who are struggling try to beg their credit providers for some relief. Sadly, this often leads to frustration or unrealistic demands.
Different credit providers may demand different amounts or demand commitments that you simply cannot make. They are often guilty of going back on their agents promises.
This is where debt review stands apart. It works because it is built on law, it follows a clear and easy process, and helps balance power between consumers and credit providers.
Not Just Asking Nicely
Debt review was created under the National Credit Act.
This means it is not just about asking nicely for lower payments. It is a legal process that credit providers must recognise. Once a person is accepted into debt review, they gain protection from new legal action. This gives them breathing space and the chance to deal with their debt in a safe and fair way.
The process is also pretty straightforward. A person applies through an NCR registered Debt Counsellor. The debt counsellor gathers all the needed information about debts and living expenses. Each credit provider is properly notified and must supply details about the money owed.
A debt repayment plan is then designed around what the person can really afford. Instead of trying to pay everyone everything at once, the plan allows smaller monthly payments over a longer time.
One of the reasons debt review works so well is because credit providers are forced to help. By law they must work with debt counsellors once a consumer has officially entered the process.
The good news is that in most cases they go further than just required by offering amazing concessions. This can mean lowering interest or removing certain fees. These changes make the required monthly payment much smaller.
- For the consumer, this brings a lot of relief and allows for a more realistic budget.
- For the credit provider, it means recovering their money over time (compared to a person who simply stops paying).
The repayment plan is then taken to court or the National Consumer Tribunal. Once approved, it becomes binding. This gives both sides certainty. The consumer is protected and credit providers know they will receive money each month.
Balancing the Power
Some credit providers may tell people not to rush into debt review.
Why?
Because debt review takes away their power to make unrealistic demands or to take advantage of consumers who do not fully know their rights. On their own, many people do not know what is actually allowed.
Debt review levels the playing field and makes sure all credit providers are treated fairly while the consumer gets a chance to recover and pay off their debt.
Debt review works because it creates a ‘win win’ situation.
- Consumers get smaller and more realistic payments that they can stick to.
- Credit providers get steady repayments without the costs of legal battles.
Most of all, debt review works because it is a clear legal process that removes pressure and replaces it with a realistic plan that actually can succeed.
