Credit counselling is a complicated process, and since no two situations are the same it is very difficult to estimate how long a debtor will be in credit counselling. The best estimates that can be offered are general guidelines based on the experience of others who have already successfully completed the consumer credit counselling process. They will help you to determine whether Canadian credit counselling is the right option for you or if another debt solution such as debt settlement or debt consolidation might be better.
Time Frames for Debt Relief Options in Canada
Different debt strategies have different time-frames, and it’s important to weigh the time spent in the program to the other costs such as how much you actually pay on the loan and how your credit is affected.
Those who are filing for bankruptcy for the first time, for example, and abide carefully by all the rules set out by the trustee are eligible to have the bankruptcy automatically discharged after nine months if no surplus income payments are required. It is nearly impossible for any other debt solution to free you from all your debt within the same time frame. Consequently, personal bankruptcy might be the best option for you if your goal is quick debt elimination above all else.
Other debt solutions such as debt consolidation can take much longer to get you out of debt completely. The interest rate reduction will save you money whenever you take out a consolidation loan, but without a serious reduction of your principal like you get in a debt settlement program, the money you save in interest may be less than you can save as you repay debt according to the terms of other debt solutions. Moreover, it may also take you longer to repay your debt if you get no principal reduction. Of course a debt settlement program won’t damage your credit as much as bankruptcy, and is less disruptive to your entire life.
Because credit counselling focuses on teaching you to manage your own debt, you won’t speed up the process as much as other solutions. You will probably get an interest rate reduction and easier-to-manage monthly payments, but your principal owed will remain.
Your Particular Situation
There is no hard and fast rule as to how long you will be in credit counselling if you decide to go that route. It’s all going to depend on how well you learn to live on a budget, the difference between your average interest rate before and after you enter counselling, the total amount that you owe, and your ability to pay more than just the minimum payment each month. Conceivably, you could be out of debt in as little as 12 months under a good credit counselling plan if all the stars line up just right and you work hard to cut your expenses for the sake of paying more towards your debt principal. It could also take many years if your interest rate savings were not as significant as you expect and you are unable to pay any extra towards your debt principal than you are currently paying.
Find Out More Today
If saving time and money is important to you, you’ll want to seriously consider your options and choose the best debt relief solution for your specific situation. Fill out the form on the debt relief page to learn more about your options and find out which debt relief solution is right for you.