How Long Does Debt Settlement Take?

When you are considering debt settlement for your situation, time is often a priority.

Consequently, for debtors, one of the most important questions to figure out is: How long does debt settlement take?

A debt-relief solution that gets you debt-free as quickly as possible might seem, at first, like the best option.

However, time is one of the factors you need to take into account when addressing your debt.

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The right debt relief strategy needs to balance your priorities, whether they are:


  • The cost of the solution;
  • How it affects your credit rating once you’re debt-free;
  • How long it will take.


If you look at the big picture, the time factor may not be the right priority for you.

Someone who needs fast debt relief may not expect the same end result as someone who wants to preserve their credit rating as much as possible, for instance.

Understanding whether debt settlement is right for you depends on your financial objectives.

Debt settlement duration

A debt settlement program doesn’t have a strict time frame.

The duration of your debt settlement is determined by your individual situation: the amount of debt and how much you can afford to pay toward amortizing it each month.

Therefore, debt settlement takes, in theory, as long as you need to repay the agreed amount.

Typically, this program will get people out of debt within 1 to 3 years.

Is a debt settlement program the fastest solution?

If time is your priority to get out of debt, a debt settlement program doesn’t offer the fastest debt resolution approach.

Filing for personal bankruptcy can get you out of debt within 9 months if you’re a first-time filer.

Comparing costs, personal bankruptcy can be a cost-saving approach to debt, as you are responsible for paying a minimum of $1,800.00 over the term of the bankruptcy.

The minimum cost is set by the government, which means that it is the same for everyone.

On the other hand, a debt settlement program will negotiate the partial repayment of your debt, which is likely to exceed the minimum bankruptcy cost.

Finally, it is crucial to understand that, while first-time bankruptcy filers can be discharged from debt in under a year, the process gets you an R9 credit rating, which is the worst possible rating.

In bankruptcy, you need to surrender your assets, such as personal property, including your home and vehicles.

As a result, you are debt-free, but you need to rebuild your financial situation from scratch.

On the other hand, debt settlement allows you to protect your assets as long as you comply with the terms of the agreement.

Your credit rating will be 7 after the debt settlement program.

Is debt settlement my only option outside of personal bankruptcy?

Debt settlement is one of the debt management programs available.

The best way to define whether it is the right solution for you is to compare the different debt programs.

Debt consolidation can reduce the total interest rate on your debt repayment by combining all debts under a single consolidation loan.

This allows you to amortize the totality of the debt over a shorter time and to save cost in total interest payments.

Credit counselling can provide support alongside an existing debt program.

Credit counselling companies can negotiate elements such as your interest rate and the length of repayment terms, saving you time and money.

The consumer proposal is an individual proposal designed by a Licensed Insolvency Trustee, which offers a type of consolidation loan over a maximum period of 5 years or 60 months.

The trustee will also negotiate a repayment amount based on what the debtor can afford to pay.

At the end of the consumer proposal, you are debt-free.

Consumer proposals have a high acceptance rate.

Finally, the company can negotiate with creditors a lesser repayment amount over a shorter term.

If the creditors accept the negotiations, the debt can save money both on interests and debt amount.

Who is debt settlement programs for?

Debt settlement programs are an ideal solution for debtors who want to save money while making the payments they can afford to amortize the debt.

Like the consumer proposal, debt settlement reduces the amount of the debt, the duration of payment, and the interest rate.

However, it’s important to mention that creditors may not accept to negotiate with debt settlement companies.

Debtors who can go through a debt settlement program are in a better position to rebuild their finances once the debt is over.

Unsure whether a debt settlement program is the right solution for you?

Book your free debt consultation with one of our trustees to get out of debt on the best terms.

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