Simply put, the quicker you can resolve your debt, the better. It can certainly be confusing when trying to determine an acceptable timeframe to resolve your debt. There are a few factors that come in to play. The amount of time it will take you to resolve your debt is directly related to your monthly Contribution Amount and how much your creditors will eventually settle for. The more money you can save up each month, the sooner you will be able to resolve your debt. And, the lower the resolutions with your creditors, the less you will have to contribute so the quicker you will be out of debt.
The Exclusive Debt O Meter will help you decide:
When using the Debt O Meter to build your Plan & Goal, the timeframe will default to 48 months. While this is an acceptable timeframe, you are encouraged to reduce your timeframe to as short as you can afford. As you increase your monthly Contribution Amount, you can reduce your timeframe. A 24 month timeframe is ideal, if you can afford it. If you can’t afford it, move out to a 36 month timeframe to see if that results in a Contribution Amount that you can afford. Take some time to play with the sliders on the Debt O Meter to build a Plan & Goal that is the shortest timeframe you can afford.
The Debt O Meter uses industry averages for resolution percentages specific to your creditors to calculate your Plan & Goal. Should your resolutions be lower than the industry averages, your overall Contributions will be lower. Should your resolutions be more than the industry averages your overall Contributions will be more than you planned. For most users, this means you will just have to Contribute a few more months than planned.