Understanding the Process of Debt Review
Debt is what a person owes to others. A debt review is done by a debt counselor who has experience in this field. A person borrows money from others for many reasons. These debts, over a period of time, increase to a large extent that the person cannot afford to pay the money back. The person may lose property or other such stable assets. Debt counselors provide financial assistance and advice to the persons who have a bad record of money management. The counseling is to improve the person’s financial status and moral respect. The debt counselor will assist the person with a debt review. A debt review process encompasses the person to understand the current situation, to teach the person about the process of credit, debit and mortgages, teaches the person to plan a budget and spend accordingly, helps them to find new income by extra work, to repay the debts through small amounts etc. payment of debts at the correct time will prevent the person from being sued or from getting arrested
The debt counselor will provide assistance for debt relief. The debt review enumerates the list of problems and provides a debt solution. The steps in the debt review process are as follows:
1) Making a list of all the debts the person has to pay.
2) Rank the debts according to their importance. If a debt involves losing a property, then it is placed on top of the list. 3) If a debt involves being sued or being arrested then it is placed at the top. Debts relating to friends or family can be placed at the bottom of the list and so on.
4) Ranking the debts will assist a person to identify critical debts from non critical debts.
5) Plotting an action plan regarding the incomes and expenses. This will assist the person to reduce the expenses and save money for debts.
6) The person can be advised on various aspects or ways in which these debts can be settled.
7) The person will have to speak to the creditors directly. Explain them about the current situation and promising them to return the money back either in small settlements or after a period of time.
A stitch in time saves nine. If a person is not financially sound, then the person can get debt help from others. Borrowing money should be such that it can be repaid within a time frame. Creditors should consider the financial situation of a person before assisting financial help.