How Long Will it Take for a Consumer Credit Counselling?
The process and duration of credit counselling largely depend on your situation and response on how to execute the plan. Thus, it is hard to tell how long will you be under consumer credit counselling. The exact duration can only be anticipated based on the overall guidelines that are taken by those individuals who have completed the process of credit counselling successfully. Moreover, knowing the time frame and the process will help you distinguish what debt solution is better for you, whether a debt settlement or debt consolidation.
In This Guide...
Debt Relief Options in Canada Time Frames
Each debt relief program involves different time frames. Therefore, it is imperative to understand the process of each program, including the time frame and the amount that it will cost to pay off your debt, as well as its effect on your credit.
Bankruptcy and other Debt Solutions
For instance, if you file for bankruptcy for the first time, you will be discharged after nine months. This can only be possible if you obey the rules stipulated in your bankruptcy agreement, which is established by your bankruptcy trustee. Also, you will be automatically discharged from bankruptcy if you are not obliged to pay for surplus income. This duration is the least time frame compared to the other debt relief option. This is because it is somehow impossible for you to come out debt free after nine months if you consider the other debt relief approach. Hence, if your goal is to eliminate your debts as quickly as possible, filing for personal bankruptcy is an alternative that you might consider.
Debt Settlement and Debt Consolidation
On the other hand, debt consolidation can take you a while to pay off your debt entirely. Although the interest rate can save you some money when taking a debt consolidation loan, it will still take you time to pay off your debt considering that your principal is not reduced. In contrast, a debt settlement program will allow a reduction in your principal; plus, the money that you can keep from the interest may be less as compared to consolidation loans and other debt-relief approaches. Moreover, if you did not get a principal reduction on your debt settlement, it may also take you longer to pay off your debt. The good side is that a debt settlement will not damage your credit rating as compared to bankruptcy and is perceived to be more convenient by most.
Credit Counselling
Furthermore, credit counselling does not guarantee a speedy process as much as bankruptcy and other debt solutions. This is because credit counselling primarily has its focus on teaching you how to manage your finances and debt. Besides, you can apparently get a reduction in your interest, making it more feasible for you to pay the required amount every month. However, the principal amount that you owe will not be reduced, resulting in a much longer process.
Duration vs. Your Situation
It should be clear by now that there is no specific guarantee that indicates a swift consumer credit couselling process. The duration of the process will depend on your disposition on how you manage your budget, the interest difference before and after you enter counselling, the sum of your debt, and your capacity to pay more than the minimum every month.
Ideally, with a good counselling in place, you’ll be debt-free in just as few as 12 months. This can only be feasible if you strive to stay on budget and cut expenses to save money in paying more than your minimum amount each month. As you pay more than the minimum, the money will go towards your principal. In contract, it can also take a couple of years if your average interest rate difference is not reduced as much for you to save some extra for your principal.
Learn More Today
If you value your time and money, you might need to carefully weigh your options in choosing among the debt relief solution that is appropriate for your situation. To learn more, simply fill out the debt relief form and get the help that you need.
