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HELP / FAQ:
Why can't I just negotiate with my creditors directly?
In some cases, you can negotiate with creditors on your own
to arrange payment or have positive information reported to
a credit bureau. However, to get the benefits of lowered
monthly payments, interest rates, and have the late charges
and over the limit fees waived, you will need a pre-approved
Debt Management Program accepted by your creditors
nationwide. As an approved non-profit organization,
our certified credit counselors can secure you these
benefits not usually available to credit consumers directly.
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Why
can’t I just keep paying off my creditors on my own?
If you keep paying just the minimum to your creditors at the
current interest rate, it will take you much longer than if
you paid off your debt through CMCS's Debt Management
Program. According to the American Bankers Association, if
you are paying the monthly minimum of 2.5% of the balance at
an average interest rate of 18.5%, a $10,000 debt will take
32 years to pay off at a cost of over $24,500. Because we
may be able to reduce your interest rates, stop late fees, and so on, it will take a lot less time to pay
off your debt through us. Chances are, in the past, all your
debt payments have just gone to pay off interest and fees. You
probably haven’t even touched the balance! On average, CMCS
Debt Management Program clients pay off their debts in 3 to
6 years, depending on individual circumstances.
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How
much will it cost me to be on the Debt Management Program?
The initial consultation and budget assessment is FREE to everyone.
If you choose to enroll in the Debt Management Program
consolidation, there is a
small monthly maintenance charge to cover the costs of
handling accounts. The monthly maintenance charge is determined
by the number of accounts a client has on the Debt
Management Program. As a not-for profit organization, CMCS depends on these small contributions to meet our
operating costs.
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How
will joining the CMCS Debt Management Program affect my
credit rating?
Do you have a good credit history?
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1. How does this affect my credit rating ( if
current)? |
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Banks judge your credit in two ways: Your payment
history and your debt to income ratio. Right now you
have a great payment history, the problem you are having
is that you are a little over-indebted. By participating
in our Debt Management Program your payment history will
remain current, and by reducing the interest rates the
banks are charging you, more of your money will go towards
your balances. This will bring your debt to income ratio
down in line to exactly what the banks are looking for. |
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2. How does this affect my credit (if behind)? |
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Right now, credit reporting agencies consider you a slow paying credit
customer. By participating in our Debt Management
Program, most creditors will re-age your accounts back to a
current status after only three (On-time) program
payments. The 3 months of on-time payments will show the bank that you are back on
track with your budget and finances. |
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Can
I send in more money once I have a better cash flow?
Of course - you can always increase your monthly payment.
The more you pay, the faster your accounts will be paid off.
Just let your CMCS credit counselor know you want to
increase your payments beforehand, so we can determine which
creditors should receive the extra money.
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Should I pay my bills in the time before I send you my first
payment?
That’s your decision. We recommend that you do if you can,
because there is a brief negotiation period, after we
receive your first CMCS payment, when we make arrangements
for future payments with your creditors. If you miss due
dates for accounts in the meantime, you are risking penalty
fees and negative information being reported to the credit
bureau.
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Will I still receive harassing phone calls?
You might get calls the first several months on the program
since it takes time for your creditor’s collection
department to find out you are with CMCS.
If you get a harassing call, inform them to call CMCS
and speak to your counselor. If you get a harassing
call from a collections agency that is not part of your
creditor’s company, we will provide you with a cease and
desist letter. Third party collection agents must obey this
letter, pursuant to the Fair Debt Collection Practices Act.
Make sure you tell your counselor if you receive
any such calls from a 3rd party collection agent.
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