How does debt review protect you from reckless lending?

Debt review is a process designed to assist consumers who are struggling to manage their debts. One of the key benefits of debt review is its ability to protect consumers from reckless lending practices.

Debt review is a process designed to assist consumers who are struggling to manage their debts. One of the key benefits of debt review is its ability to protect consumers from reckless lending practices.

When a consumer enters into debt review, a debt counsellor assesses their financial situation and negotiates with credit providers on their behalf. This process helps to ensure that the consumer's debt repayment obligations are reasonable and manageable based on their income and expenses.

In addition, debt review can help protect consumers from falling victim to reckless lending practices. Credit providers are required to conduct a thorough assessment of a consumer's financial position before granting credit. This assessment helps to ensure that the consumer can afford the credit and is not being burdened with unmanageable debt.

If a credit provider is found to have granted credit recklessly, such as by failing to conduct a proper affordability assessment, the consumer may have grounds to have the credit agreement declared reckless. In such cases, the consumer may be entitled to have the credit agreement set aside or have the repayment terms adjusted to be more affordable.

Overall, debt review provides consumers with important protections against reckless lending and can help them manage their debts more effectively. By working with a qualified debt counsellor, consumers can take control of their financial situation and work towards becoming debt-free.