Debt review, also known as debt counseling or debt consolidation, is a formal process designed to help individuals manage and repay their debts more effectively. It involves working with a specialized agency or counselor to assess your financial situation, negotiate with creditors, and create a structured repayment plan tailored to your needs.

To qualify for debt review, you typically need to have a steady source of income and be struggling to meet your financial obligations due to overwhelming debt. Each case is unique, so it’s best to consult with a debt counselor to determine if debt review is the right option for you.

Entering debt review may have a temporary impact on your credit score, as it involves negotiating new repayment terms with creditors. However, successfully completing the debt review process can demonstrate responsible financial behavior and may ultimately improve your credit score over time.

The duration of debt review can vary depending on factors such as the amount of debt you owe, your creditors’ cooperation, and your ability to make regular payments. On average, debt review programs typically last between three to five years, but this can vary based on individual circumstances.

Debt review can typically include most debts, such as credit card debt, personal loans, medical bills, and certain types of installment loans. As well as secured debts like mortgages and car loans are usually eligible for debt review.

Once you enter debt review, creditors are legally required to cease all collection efforts, including phone calls, letters, and legal actions, as long as you adhere to the terms of the repayment plan negotiated by your debt counselor.

While under debt review, you are generally advised to avoid taking on additional debt or using credit cards, as this can exacerbate your financial situation. However, every case is different, so it’s essential to discuss any major financial decisions with your debt counselor.

If you miss a payment during debt review, it’s crucial to contact your debt counselor as soon as possible to discuss your options. Depending on the circumstances, your counselor may be able to negotiate new terms with your creditors or help you develop a plan to get back on track.

While debt review and debt consolidation both involve combining multiple debts into a single payment, they are not the same. Debt review is a formal debt management process that typically involves negotiating with creditors and creating a structured repayment plan, whereas debt consolidation involves taking out a new loan to pay off existing debts.

The cost of debt review can vary depending on factors such as the amount of debt you owe and the fees charged by the debt counseling agency. However, fees for debt review are typically regulated by law and may include an initial assessment fee, monthly administration fees, and a once-off restructuring fee.