Debt Review is a Mistake if you have a property, REA has better solutions
If you are under debt review, you can lose your home!
You may have heard that the property market is very active right now. But if you are under debt review, you might not realize that this can be a huge problem.
The primary reason why homeowners enter debt review is because of their inability to make payments on their mortgage loans or other secured debts. The credit providers have the right to repossess the property if you are under debt review, so if you ignore it, they will take this step as soon as possible.
The process of repossession is simple: The lender will file an application with a Court and indicate how much money they want paid back in full with interest and costs (if any). You will receive formal notice of this application.
What is debt review?
Debt review is a legal process that allows you to have your debt reviewed and amended. Debt review was introduced in 2007 to protect consumers from unfair debt collection practices. Unfortunately, this process does not work for everyone and it isn’t the solution if you have a property.
If you’re faced with an unsecured loan or credit card debt, then the best option is always to contact Real Estate Assist before the lender takes action against your property by putting it on the market.
How does Debt review work?
If you’re thinking about going down this path, it might be good to know what goes on behind the scenes.
Here are some things you should know about the Debt Review process:
- Debt Counsellors negotiate with your creditors on your behalf
- You pay a fee for these services
- A debt counsellor will help you create a budget, in which they can explain how much money you should be spending each month on essentials like food and rent. They’ll also help set up a plan for paying off your debts using regular payments or lump sum payments if possible.
I hope this article has been helpful in explaining how debt review works. If there is anything else I can do to help please let me know in the comments below!
Why is debt review not the best option?
Debt review can be an excellent option if you’re able to afford it. It’s not a great way of getting your finances back on track and getting rid of debt. Debt review is a formal agreement between you and your creditors. That means that you’ll still have to deal with them even after the process is complete. This can be stressful and time consuming, especially if one creditor doesn’t agree with the others or doesn’t want anything to do with the debt review process at all!
If this happens, you’re left without any form of protection against aggressive collection methods like:
- legal action—which could mean losing your home or car because they’ve been repossessed! The worst part?
- Banks are legally allowed to blacklist people who have had their property repossessed from them due to non-payment (even when it wasn’t their fault).
- Contact Real Estate Assist if you are in any of these distressing situations
The downsides to being under debt review.
- You have no control over your finances.
- Your credit profile is damaged.
- You could still be blacklisted by the NCR.
- You cannot alter your payment agreements, so you may find yourself paying more than you should be if interest rates rise in future or if a lender decides to charge a higher rate on your loan.* If you’re under debt review and want to refinance, then it’s unlikely that any bank will give you a mortgage unless they are sure of their chances of getting the money back from the NCR.* If the NCR don’t agree with whatever arrangement has been made between themselves and their borrower, then they can take back possession of one’s home without warning!
The Credit profile is damaged.
If you have a property and have done a debt review your credit profile might be damaged. Especially If you have not received your debt review clearance certificate.
Your credit profile is important for your ability to borrow money and get the best rates on loans. In fact, having a good credit score will save you money on interest repayments over time.
A good credit score can also help you qualify for home loans with lower interest rates.
Lenders see them as more reliable than those who don’t have strong scores.
You could still be blacklisted by the NCR.
You can still be blacklisted. Even if your debt review certificate shows you have paid off your debts. The National Credit Regulator (NCR) may blacklist you for not having paid back the money owed to your creditors. Being blacklisted will make it almost impossible for you to get credit in the future.
You cannot alter your payment agreements.
Don’t have an option to pay off your debt sooner:
You can’t negotiate better payment terms, change your budget or the amount you pay.
How do I get out of Debt Review?
There are ways you can remove yourself from the debt review database:
- Pay off all your debts and obtain a clearance certificate.
- Get a letter of good standing.
- Contact Real Estate Assist to cancel your debt review
If you own property, it is important to find a better solution than debt review
If you own property, it is important to find a better solution than debt review. Debt review is not the best option. If you are under debt review, you can lose your home and if that happens then it will be very difficult for you to get back on your feet. This means that in the future when it comes time for property investment or buying an investment property such as an apartment block or commercial building then it will be even more difficult with all these debts hanging over your head.
To avoid getting into this situation, contact Real Estate Assist ASAP. We have helped many homeowners stop legal action, Repossession and auctions through our Real Estate Assist program. Homeowners who are experiencing financial hardship stay in their homes without having to pay off their entire mortgage balance at once!
