You have probably heard about debt counselling and may be thinking it is a process that can benefit you. We’re often asked how long the process can take.
On average the debt counselling process can take between 3-5 years to become debt free and have a clear credit record. However, the time taken is dependent on how much debt you have and how much you can afford to pay back each month.
Your debt counsellor will t negotiate with your creditors to lower the debt repayment amount as well as the interest rates so that you can pay one reduced amount towards your debt each month. By reducing interest rates you will be paying less for your debt in the long term.
Why debt counselling?
The aim of the debt counselling process is to reduce your monthly installments so you can pay off your debt at a rate that you can afford as well as having enough money left over during the month for living expenses.
Once you have entered debt counselling, your debt is consolidated into one reduced repayment as opposed to multiple payments. Your creditors will be managed by your debt counsellor on your behalf and you can ignore any calls or letters they may continue to send. Your creditors cannot proceed with any legal action and your assets are protected immediately.
Once you have entered the debt counselling process ensure you make your payments as agreed as any missed payments can have a negative impact on the revised plan. Once you have missed 3 months repayments you are no longer protected, and your creditors can proceed with legal action against you. You will be liable to pay the full debt amount at the original interest rate.
Remember – your debt has been reduced to an amount that you can afford so you can keep up with your monthly repayments. At the end of the
process you will receive a clearance certificate and have a clean credit record – any reference to arrears or defaults is removed If your financial situation improves while under debt review, you can always increase your monthly repayments to pay off your debt quicker
Debt review can help you to gain control of your finances and make your life easier! Contact Meerkat today for help.