How long does the debt counselling process take?

8 November 2018

You may be familiar with the term “debt counselling”, but perhaps you have questions around the process and specifically how long it takes to complete.

While the general time frame is 60 months or between 3 to 5 years, it is dependent on how much debt you have and how much you can afford to repay per month. This is because each case is assessed individually and based on what you can afford.

The debt counsellor will then negotiate with your credit providers to lengthen the repayment timeframe, and to lower the interest rates and fees on your debt. Lengthening the payment terms will allow you a longer time in which to pay off your debt. This will result in lower monthly instalments. The lowering of interest rates and fees on your debt will also save you a considerable amount of money in the long run.

The main goal of debt counselling is to lessen your monthly debt instalments, making it more affordable for you to pay it every month while still allowing you to afford your living expenses.

Once you are under debt counselling, you will make one combined reduced monthly payment as opposed to paying each credit provider individually. Your debt counsellor will then get a court order or a consent order on your behalf, which will provide you with legal protection from your credit providers. This means they will no longer be authorised to call and harass you about any outstanding debt.

Another factor in the process is your commitment. What this means is that if you are not committed and diligent about making your debt repayments, you will fall further behind and essentially take far longer to reach your financial goals. Undergoing debt counselling requires you to be disciplined and cooperative in ensuring a smooth process.

But it is a small price to pay in exchange for protection from losing your assets, as well as the clearance certificate you will receive at the end of the process to certify your debt freedom.

In addition, should your financial position change while under debt counselling and you are able to pay larger amounts or a lump-sum amount, it can be arranged that you conclude the process even sooner.

Chances are you didn’t land yourself in hot water with your finances overnight, so it’s only fair that you allow the rehabilitation process to also run its course.