A big part of the debt settlement process is negotiating with your creditors. People with no viable way to pay their bills face stacked odds when negotiating with credit card companies, banks and others. Many try to draw out the process, which could lead to your debt continuing to mount. In this case, it might be time to look for other debt relief options, like bankruptcy.
Overwhelming debt can bring overwhelming stress to your life. With daily harassment from collectors and bills piling up, weeks can feel like months. And months can feel like years. Time becomes a crucial consideration when selecting a debt relief approach.
How long does debt relief take?
Rome wasn’t built in a day, and debt relief doesn’t happen overnight. Here’s how long the process typically takes for these options:
- Debt consolidation loan: You can take out one loan with lower interest rates to cover all your debts. Terms for monthly payments usually span between 24 and 60 months. You can also pay with a balance transfer card with a zero-interest period of 12 to 18 months.
- Debt settlement program: If you can get your creditor to settle for less money or an extension, you will be asked to make monthly deposits. These programs are typically completed in three to five years.
- Credit counseling: A credit counselor can guide you in taking control of your cash flow. They may recommend a debt management plan with a fixed timeline of three to five years to complete. But only trust a legitimate agency with your finances.
- Chapter 13 bankruptcy: A Chapter 13 repayment plan usually spans three to five years. Your trustee will be disbursing your monthly payments to the creditors. The plan prohibits the creditors from directly collecting from you.
- Chapter 7 bankruptcy: Debt discharge comes after liquidating all your non-exempt assets. The process usually occurs four months after filing and can take up to six months for final discharge. However, it can stay on your credit report for up to 10 years.
Before choosing a debt relief option, consider talking to an experienced bankruptcy lawyer. Debt consolidation loans, settlement programs and even credit counseling can prolong achieving financial security. Some of these companies will do what’s best for their bottom lines.
Attorneys, on the other hand, have a legal duty to act in your best interests when assessing your financial situation and the time it takes to settle your debts.
