The Debt Review process was established to offer a legal safeguard for over-indebted consumers, providing protection from aggressive creditor actions while they work towards financial recovery. However, there are instances where creditors still attempt to initiate legal proceedings against clients under debt review. This not only undermines the intent of the process but also creates unnecessary stress for clients.

Here’s what you need to know about such situations and how they can be addressed. 

Why Does It Happen? 

Creditors may initiate legal action despite a client being under debt review for several reasons: 

1. Uncooperative Creditors: Occasionally, certain creditors may resist the debt review process and pursue legal action in an attempt to recover their funds more quickly.
2. Disputed Debt Review Status: A creditor might challenge the validity of the debt review application, especially if they believe the client doesn’t qualify.
3. Miscommunication or Delays: In some cases, creditors may not have been properly informed of the client’s debt review status or may not have received Form 17.1 and Form 17.2 notifications on time.

 

How Does This Impact the Client? 

Legal action by creditors during debt review can cause significant distress for clients. It creates confusion and fear, as clients may feel that their financial protection is being violated. Additionally, it can disrupt the repayment plan and cause delays in the debt review process. 

 

How We Protect Clients from Legal Action 

At SS Debt Counsellors, we understand how intimidating legal threats can be. Our team, supported by our in-house attorney, takes immediate and decisive steps to protect clients: 

1. Verification of Compliance: We ensure that all necessary notifications, such as the Form 17.1 and 17.2, were properly issued to creditors. This establishes the legal basis of the client’s debt review process.
2. Engagement with Creditors: We reach out to the creditor to remind them of the client’s debt review status and the legal protections it affords. In many cases, this intervention is enough to resolve the matter.
3. Court Intervention: If necessary, we escalate the case to the court. With the assistance of our in-house attorney, we challenge the creditor’s actions and advocate for the client’s rights. This ensures that the debt review process remains intact, and that the client is protected from unfair legal action.
4. Client Support and Reassurance: Throughout the process, we keep clients informed and supported. Knowing that we are actively working to resolve the issue provides them with peace of mind.

 

What Can Clients Do? 

As a client under debt review, there are a few steps you can take to safeguard yourself: 

– Keep Communication Open: Maintain regular contact with your debt counsellor and inform them of any legal notices you receive. 

– Follow Your Repayment Plan: Ensure that payments are made on time as per the agreed repayment plan. 

– Stay Calm: Legal threats can be stressful but remember that the debt review process is there to protect you. Your debt counsellor is your advocate and will handle the situation on your behalf. 

 

 Conclusion 

The Debt Review process is a powerful tool for achieving financial freedom, but challenges can arise when creditors disregard its protections. At SS Debt Counsellors, we are committed to standing by our clients every step of the way. Our legal expertise and unwavering dedication ensure that clients can focus on regaining control of their finances, free from the fear of creditor actions.