03 Jul Your First 3 Months Under Debt Review Explained
The best way to approach any major life decision is to be fully prepared. If you know what comes next, it feels much easier to manage the process of overcoming your debts. The long-term benefits of debt counselling make it a smart decision if you are over-indebted. But how will things go down in the very beginning? Here are your first 3 months under debt review explained.
Use our FREE ONLINE CALCULATOR to plan your debt repayments during Debt Review.
Debt Review – Months 1 to 3
Right at the start of the process, your debt counsellor gets to work assessing your full financial situation. This includes going over your income, monthly expenses, and the total amount you owe across all accounts. We will also take your living costs into account to make sure your basic needs are covered while still presenting you with a realistic repayment plan.
During your first 3 months under debt review, you’ll be paying back fees to cover the debt review process. These fees are already built into your new monthly repayment. Depending on how much you’re able to afford, the setup costs are either paid off in the first month or spread over the first three months, so there are no surprise charges or extra payments outside of your agreed plan.
The fees you will be paying back include debt counsellor/debt review fees, legal fees, and payment distribution (PDA) fees. All fees are regulated by the National Credit Regulator (NCR). In some cases, there may be a Reckless Lending fee (payable in month 2) – this amount allows us to carry out an assessment and supply documents to an attorney, who drafts an affidavit on the outcome of this assessment.
How to Keep Track
It’s important to note that creditor statements aren’t the best way to track your progress during debt review. They will still show your accounts as being in arrears, which can be confusing. Rather, rely on the statements you receive from your Payment Distribution Agency (PDA) — these reflect your updated repayment amounts, adjusted interest rates, and the full details of your new payment plan.
Note that debt review will impact your credit score, but it is only temporary. Your credit profile will be flagged to show that you’re under debt review — this is a legal requirement and helps protect you from taking on more credit. The good news? Once you’ve successfully completed the process and received your clearance certificate, this flag is removed, and your profile can start to recover. Knowing how to stay financially fit will help you maintain a good relationship with money in the years following Debt Review.
Debt Review After Month 3
This is when progress begins and all the initial fees have been dealt with. The PDA statements you receive will reflect your decreasing balance, and our True North Debt team will be right beside you as you work towards becoming debt free.
Debt Review provides a legal way to reduce your debt payments. We’re here to help you make it happen! Contact us today and look forward to the difference debt review can make.
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