Who is eligible for the debt management program?
You are likely eligible for the debt management plan if you are experiencing the following financial warning signs:
- You are currently behind or have been behind on any of your payments in the recent past.
- You are only able to pay the minimum payments on your accounts each month.
- You anticipate a change in your financial situation that may make it difficult for you to make payments on your obligations in the future.
In order to determine your eligibility for debt consolidation you can fill out an online budget and application form or contact a DebtHelper.com credit counselor at (800)920-2262. A DebtHelper.com credit counselor will review your budget information with you to determine the best course of action in improving your financial situation. All counseling consultations are free and strictly confidential.
What are the benefits of the debt management plan?
Most creditors provide financially distressed clients the following direct benefits through the debt management plan:
- Lower monthly payments.
- Lower interest rates.
- Suspension of late and over limit fees.
- Account re-ages after several consecutive monthly payments.
- Discontinuation of collection calls.
For consumers that are currently past due on their accounts the debt management plan will provide the immediate benefits of lower payments, late and over limit fee suspension and account re-ages. These benefits immediately provide our clients with a fresh start on paying their accounts and enable them to avoid collections, charged-off accounts and possible bankruptcy. The biggest long-term benefit of the debt management plan is the reduction in interest charges. Reduced APRs allow our clients to pay off their accounts faster while saving them possibly thousands in finance charges.
Can I keep using my accounts?
No. Keep in mind that the primary goal when joining a debt management plan is to become debt free. All accounts that you include on the debt management plan will be closed.
How long will my accounts take to pay off on the debt management plan?
The debt management plan is designed so that consumers can pay off their accounts within a 3 to 5 year period. Some clients begin the debt management plan during a time of severe distress due to an unforeseen hardship and therefore are only able to make minimum payments to start. As they begin to regain financial stability, however, many clients are able to send more than the minimum payments and therefore complete their debt management plans earlier than forecasted.
If you are non-profit, how do you maintain your services?
Because Credit Card Management Services is a 501(c)(3) nonprofit agency, we rely on voluntary contributions from our clients and their creditors. Most credit card companies will provide us with a Fair Share Contribution, typically between 5-10% of our clients’ monthly payment to DebtHelper.com. These contributions allow DebtHelper.com to provide its services to financially distressed consumers and to continue its operation.
What fees do you charge in order to provide the debt management plan?
All initial counseling, including budget and debt review, is free. If you were to qualify and choose to enroll on a debt management plan, the costs may vary based on your state’s regulations and the number of unsecured accounts you place on the program. Clients typically pay a nominal set-up cost to cover the expense of account activation, and a monthly servicing cost to cover recurring expenses. Clients under severe financial distress may have some of their costs waived.
Will DebtHelper.com keep my first payment?
No. DebtHelper.com feels that keeping your first payment would be inconsistent with our charter as a 501(c)(3) nonprofit agency. Moreover, a delay in disbursement to your creditors may result in increased collection activity, charged off accounts and unnecessary stress. DebtHelper.com is your ally in working to reduce your unsecured debts and we feel that keeping your first payment would be counterproductive to our ultimate goal in helping you to become debt free.
Why can’t I just negotiate with my creditors on my own?
Most creditors are unwilling to negotiate lower terms with individual consumers if they deem them a credit risk. If you are currently past due or have been in the past then your chances of negotiating directly with your creditors are slim.
DebtHelper.com has established working relationships with your creditors that allow us to adjust the terms of repayment in order to benefit you. If you have attempted to contact your creditors directly and have been unsuccessful in negotiating better terms then the debt management plan is most likely your best option for regaining financial security.
Do the collection calls stop?
Yes. Consistent, on-time payments will ensure that the calls stop and never start again. Most collection calls stop after your first or third consecutive payment on the debt management program.
How does the debt management plan affect my credit score?
Your credit score is not directly affected by joining a debt management plan (see 4 credit-scoring myths). While some lenders may treat credit counseling unfavorably, the long-term effects of a debt management plan are beneficial. In fact, the debt management plan is designed to allow you to rebuild and restore your credit history by giving you an opportunity to:
- Bring your accounts to current status without having to pay large past due amounts.
- Rebuild and restore payment history.
- Reduce your overall amount of debt faster.
In 2003 alone, over 50 of our clients on the debt management plan were approved for home loans.
How is the amount of my payment determined?
Each of your creditors have different guidelines in regards to the minimum payment amount. Most creditors accept anywhere from 1.75% to 2.5% of your beginning balance as a minimum payment. For example, if your current balance on Credit Card A is $10,000 then your minimum payment on the debt management plan for Credit Card A would likely be between $175 to $250.
What debts can I include in my debt management plan?
All unsecured debts, including major credit cards, department store cards, gas cards, and unsecured loans. Secured loans such as house payments and car loans do not qualify for the debt management plan.
Is this like bankruptcy?
No. Although your creditors are willing to reduce your terms of repayment on the debt management plan, debt consolidation and credit counseling is not bankruptcy.
What other services do you offer?
Along with our debt management plan, DebtHelper.com offers free budget analysis and credit counseling to all consumers. DebtHelper.com also provides Reverse Mortgage Counseling to seniors 62 and older, Bankruptcy Counseling, Bankruptcy Education, Homebuyer Education, Credit Education and Florida Resident Foreclosure Assistance.
For community groups and businesses located in the South Florida area, Credit Card Management Services offers free, on-site personal finance and credit education seminars catered to your audience’s needs.
For more information regarding credit counseling and debt management plans, please visit our Credit Education Resources page. DebtHelper.com will try to maintain this page with the most up-to-date news regarding credit and personal finance issues and the most comprehensive list of educational links. If you have further questions regarding any personal finance and credit issues do not hesitate to contact a DebtHelper.com certified credit counselor at (800) 920-2262.