What Is Debt Management Program?
It is the process of using the services of Credit counseling Agency to contact your creditors to negotiate on your behalf a re-payment plan that you can afford. In most cases, creditors grant concessions like elimination of over the limit fees, late charges, and partial reduction or elimination of interest. A large majority of major department stores, credit cards, hospitals, clinics, dentists, and most other creditors will cooperate.
The result is that you make only one monthly payment to Credit Counseling Bureau, which deals with your creditors, and disburse the payments for you. This will increase the portion of your monthly payment applied to the principal, saving you thousands of dollars in interest charges and paying off your debt much faster.
What if my creditors continue to contact me?
After your enrollment, proposals are sent to your creditors are prepared within two weeks, based on pre-arranged guidelines. It is normal to continue to receive phone calls from some of your creditors for the first 45 to 60 days. THIS ONLY HAPPENS IF YOU WERE DELINQUENT BEFORE ENTERING THE PROGRAM. If a creditor does call, explain that you are aware that you are responsible for your bills, that you want to pay-off your debt and have contacted CREDIT COUNSELING BUREAU to do so. Get the name of the creditors, its representative, and a number where they can be reached, then give us a call at (619) 521-0500 with that information, so we can contact your creditor on your behalf.
It is important to understand that creditors will not be sure of your intentions of repaying your debt until they receive your first payment. That is the main reason they continue to call even though CREDIT COUNSELING BUREAU is negotiating on your behalf. Also you must know that all negotiations are conducted through the Credit Counseling Department. However, the phone calls to you come from the collection department. Until the two departments communicate with each other to acknowledge your first payment, those unwanted phone calls may continue.
What if I receive my Repayment Schedule and proposed payment is more than I had expected?
Usually, your payments will be lower than what you pay every month, however, depending on your creditor blend, some of them do not allow any concessions or reduction of interest. Just remember that our goal is to help you pay your debt as quickly as possible. CREDIT COUNSELING BUREAU is at you service to provide you with the best solution to your particular debt problem. Also, it is important to understand that you may be paying a very small percentage of the total balance due each month. In these cases, the monthly payment amount may increase slightly. Again, our goal is to get you out of debt as quickly as we can. We always want to be viewed as a part of the solution, and not as part of the problem.
Will the interest be lowered in all my accounts?
The majority of creditors agree to reduce the interest. Some creditors refuse to participate in this portion of the program. If any of your creditors don’t participate in a major way, please keep in mind that a program will still be established that will allow you to pay off your creditors in a much shorter period of time than you could have accomplished without our assistance. The interest saved on your accounts may represent thousands of dollars over the next few years.
What happens if I cannot make my monthly payment?
You must first determine what amount can be paid and call you counselor to explain the situation. The counselor can often work out a solution that is acceptable to you and your creditors. Remember, timely communication is important, and a partial payment is better than no payment at all.
What if I want to buy a car or a house while on the Debt Management Program?
Unless it is a necessary item, you should wait until your finances have stabilized. We understand that there are always circumstances that need to be addressed on an individual basis, so we encourage you to talk to your counselor when making a decision that will affect your finances.
What will this do to my credit rating?
Simply enrolling in the Debt Management Program will not affect your credit rating. Making regular, and timely payments, will affect the ration in a positive manner. If you are delinquent when you start the program, some creditors may wait until you make your third consecutive payment to reflect on your statements all the concessions regarding reduction or elimination of interest, late charges, and over the limit fees. Some creditors may choose to report your enrollment in the Debt Management Program. This is not a positive or negative thing. It is primarily to prevent you form seeking additional credit while involved in the program. In every case, the fact that you are enrolled in the Debt Management Program is a temporary record, and the creditors will remove it when you complete the program.
Can I continue to use my credit cards?
No. In most cases, the creditor temporarily closes or freezes the account. Most creditors will allow you to re-open the account once the current debt has been paid in full. Also, you may consider leaving one credit card out of the program. Leaving a credit card out of the program should be done only for emergencies, otherwise is recommended to include all of them in the program.
If I want to send extra money may I do so?
Of course. The sooner you can pay off your debt, the better.
Important Notice
All pay off amount must go through the Agency to receive certificate of completion, which is required by some creditors for your future record. All checks must be made payable to Credit Counseling Bureau, INC. Of San Diego County, or CCB. If the fund is coming from an escrow company or any other financial institution, tell them that you are in a debt management program, and that the check should be made payable to our Agency, Credit Counseling Bureau INC. Of San Diego County, or CCB. Your cooporation is appreciated.
