If you’re exploring debt counselling as an option, or if you are already in the program, you might be wondering how long does debt counselling last.
Today’s blog article aims to answer that question, and we will also provide you with a comprehensive overview of what to expect during debt counselling, the factors that affect its duration, as well as tips to help you speed up the process.
To make it easier for you, we’ve included a handy table of contents. Simply click on any section to jump straight to the information you need.
Table of Contents
What Is Debt Counselling?
So, How Long Does Debt Counselling last?
What are the Factors That Influence the Duration of Debt Counselling?
4 Tips to Speed Up Debt Counselling Process
The Goal: A Debt-Free Future
Your Debt Counselling Clearance Certificate
When Will Your Credit Status Be Updated?
What Is Debt Counselling?
Debt Counselling also know as Debt Review, is a program implemented by the National Credit Act (NCR) in 2007. The main purpose of this was to assist over-indebted South African consumers. It’s a legal process that restructures your financial obligations into an affordable manageable plan.
Here is a quick explanation of how debt counselling works:
- A registered debt counsellor will do a full assessment of your current financial situation, to establish whether you are over-indebted.
- They will then negotiate with your creditors to reduce your monthly installments.
- Your repayments are restructured into one monthly payment to ensure you will have enough money available to cover all your daily living expenses while you are paying off your debt.
- Your home and car are protected from repossession from creditors while you are under debt counselling.
- This legal safety net is designed to help you tackle your financial responsibilities without the fear of losing your most valued possessions.
Read our in depth Blog on Debt Review and Everything You Need to Know
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So, How Long Does Debt Counselling Last?
- The duration of debt counselling varies for each individual, but most cases are resolved within 36 to 60 months (3 to 5 years).
- The exact length of how long the process will take, depends on your specific financial circumstances, the amount of debt owed, and your repayment plan.
- The good news is that once you start, you’ll experience immediate relief from creditor harassment and unmanageable monthly repayments.
Do you know how much debt counselling could reduce your monthly repayment amount?
Try our Debt Reduction Estimation Calculator.
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What are the Factors That Influence the Duration of Debt Counselling?
How long debt counselling lasts is affected by several factors. Understanding these can help you plan and even reduce the time spent in the process.
Amount of Debt
Naturally, the more dues you have, the longer it will take to clear it. Your debt counsellor will assess your total financial obligations and break it down into manageable monthly repayments.
Affordable Monthly Repayments
How much you can reasonably afford to pay each month will significantly affect the duration of the process. A lower monthly repayment generally means a longer period under debt counselling.
Interest Rates
The interest rates on your debts can also extend or shorten your time spent in the process. Lower rates can potentially shorten your repayment period.
Changes in Financial Situation
If your financial circumstances improve, say through a job promotion or an unexpected windfall, you can choose to allocate more funds towards your repayments to exit program sooner.
Personal Commitment
The more diligent you are with your repayments, the quicker you will receive your clearance certificate.
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4 Tips to Speed Up the Debt Counselling Process
If you’re eager to complete debt review quickly, here are 4 practical tips to help:
1) Prioritise High-Interest Debt
Consider focusing on debts with higher interest rates first to reduce the total interest you’ll pay over time. This strategy can be particularly beneficial during your debt counselling process as it can accelerate how quickly you reach financial freedom, potentially shortening the length of how long the process will take. Always consult with your counsellor to see if this approach aligns with your personalised debt councelling plan.
2) Use Lump Sums
Use extra money such as tax returns pay-outs and work bonuses as a golden opportunity to make significant progress on your financial obligantions. You could use that money to reduce the money you owe, potentially saving you a lot in interest payments.
3) Earn Extra Income
In an age where side hustles are increasingly common, earning extra income is more achievable than ever. Doing so can significantly speed up your journey through the debt counselling process, allowing you to take bigger bites out of your debt.
4) Cut Back on Expenses
We often hear that the key to financial freedom is to earn more. But what if we told you that you can also achieve financial stability by simply spending less? When you’re undergoing debt review, every extra cent counts. Cutting back on your daily expenses can be a strategic move to accelerate your financial burden repayment and shorten the time it takes to be debt-free.
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The Goal: A Debt-Free Future
Debt Counselling is not a quick fix, but it is a structured and effective solution for those committed to overcoming debt. Once you complete the process and receive your clearance certificate, you’ll have a clean financial slate.
Why Debt Review Works
- Protection from creditors: No more harassing phone calls or letters.
- Affordable payments: Tailored to your financial situation.
- Asset security: Your home and car cannot be repossessed
By following your debt counsellor’s guidance and remaining disciplined, you’ll emerge from debt review in a stronger financial position.
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Receiving Your Clearance Certificate
A clearance certificate is a critical document that shows you’ve successfully completed the debt counselling process. This certificate indicates that you’ve repaid all your debts according to the repayment plan. Once you’ve received it, your debt counsellor will forward it to the credit bureaus, who are responsible for updating your credit profile and removing the debt review flag.
Important Tips:
- View your credit report regularly: Make sure that all your details are correct and that the removal of the flag was allocated. This can assist you to avoid any further issues and allows you to be in control of your financial recovery.
- Try and resolve any issues: We would advise you to act quickly and fix any errors that might have occurred in your credit report. This unfortunately can have an affect on your credit score.
- Track your progress: By seeing positive changes in your credit score will encourage and motivate you to reach all your new financial goals.
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When Will Your Credit Status Be Updated?
- It may take up to 21 business days to update your profile and remove your debt review status after the credit bureaus received your clearance certificate.
- After this period you can check your credit report to confirm that your status has been updated and the debt review flag removed.
- If your debt review status has not been updated after the 21 days, you can contact your debt counsellor or the credit bureaus to investigate the possible delay.
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Take the First Step Toward Financial Relief
Don’t wait until your financial situations becomes unmanageable. The sooner you reach out to Debt Rescue, your trusted Debt Counselling Partner, the sooner we can protect your from legal actions and give you the financial relief you need.
Contact us Debt Rescue Today for your Free Debt Assessment
Still have questions about Debt Counselling? Check out our FAQs for answers to common questions, including “How Long Does Debt Counselling Last”?
Debt Counselling Frequently Asked Questions