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Frequently
Asked Questions About CCCS, Creditors and Your DMP
About Consumer Credit Counseling
Service
What
does your agency do?
Are you a government agency?
Is the information
I give to CCCS confidential?
What do you charge for
your services?
Where do you get your funding?
If I have
a complaint, what is the grievance process?
About Your Debt Management
Plan (DMP)
Can
I get legal advice at CCCS?
Can you tell me the best places to
shop or where to get the best service for my money?
When I sign the Authorization
and Release form what am I signing?
When a debt management plan is set
up who must sign their names?
Where do I take my budget
from here?
What will happen
to my credit if I go through CCCS?
Can I leave the debt management
plan if I want to?
How do I do it and what will happen with my accounts?
Do I have to put all my
debts into a DMP?
Under what circumstances
will you discontinue my plan?
Can the amount I pay
each month change?
Do you hold money from
month to month?
If there are a couple of days
between when we pay in to the plan and the date checks are sent
to the creditors why can't I bring in my money a day late and still
have it go out?
If I make a payment to you and then decide
I need the money back for a particular expense will you send the
money back to me?
How do you negotiate with my creditors?
What happens if one of my
creditors rejects a proposal?
My creditors called and said I am
no longer on the plan. Is this true?
About Your Creditors
Will
my creditors know I have an appointment?
Someone told me that if I
went to CCCS that the creditors have to do whatever you tell them.
Is this true?
Are most creditors willing to
work with your agency?
Why will creditors reduce payments
through your agency but will not work directly with me?
Do you work for the creditors?
Can you stop legal action and collector
phone calls?
When I told my creditors
that I was coming to you some stopped calling immediately but others
said that they didn't work with you. Why is this?
Will all my creditors drop
interest and late charges?
About Life After Debt
What
should I do about negative marks on my credit report that were posted
after I entered the plan? Do you have any plans for recovery?
About Consumer Credit Counseling Service
What
does your agency do?
The purpose of the Consumer
Credit Counseling division of Tabor Community Services is two-fold.
First, it is the objective of this agency to educate people on credit
and money management in order to promote the wise use of money.
Secondly, CCCS strives to facilitate an alternative to personal
bankruptcy through the establishment of debt management plan that
will be both affordable to the individual and meaningful to the
creditor. Tabor Community Services also has other services in the
housing area. These include homeowner pre-purchase counseling (STEPS),
home foreclosure prevention (HEMAP), home equity conversion counseling
(HECM), shelter-to-independent living counseling and rental counseling
to prevent homelessness.
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Are
you a government agency?
No, we are not. Consumer Credit
Counseling Services of Central Pennsylvania is a private 501 c (3)
non-profit organization. It exists as a division of Tabor Community
Services Inc., which has been serving the area for over 30 years.
Other divisions of Tabor which work with housing issues are funded
largely through government grants, but are not themselves part of
any government organization or agency.
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Is
the information I give to CCCS confidential?
Absolutely. Unless you have
told anyone else, the only people who know you have been counseled
are you and the appropriate staff members of this agency. When a
debt management plan (DMP) is set in motion it is necessary, of
course, to bring the creditors into arrangement and, in so doing,
notify them of your circumstances. This is one of the purposes of
having you sign the Authorization and Release.
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What
do you charge for your services?
Counseling comes free of charge
to the client. However, if a debt management plan is established
there is a small $35 start-up fee and a monthly charge that is included
with your monthly payment. This charge is based on the amount of
money we are handling and ranges between $5 and $25.
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Where
do you get your funding?
CCCS funding comes from a variety
of sources. The majority of the funding comes from creditors in
conjunction with debt management plans. Since creditors have financial
interest in getting paid, most are willing to make a contribution
to our agency. These contributions are usually calculated as a percentage
of payments you make through your debt management plan - up to fifteen
percent (15%) of each payment received. However, your accounts with
your creditors are always to be credited with one hundred percent
(100%) of the amount you pay through us and we will work with all
your creditors regardless of whether they contribute to our agency.
Remaining funding comes through monthly fees paid by our clients
and through charitable contributions from the community.
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If
I have a complaint, what is the grievance process?
If you have a grievance, we
ask you to work with your counselor to achieve a satisfactory solution.
If this cannot be accomplished, ask your counselor to send a grievance
form for you to complete. Once returned, it will be reviewed by
the departmental director and a response made within 10 business
days (unless you are notified otherwise). If this solution is not
satisfactory to you, you may appeal in writing to the Quality Assurance
Committee of Tabor Community Services. If a satisfactory solution
is still not found, you may appeal to the board of directors of
Tabor Community Services, Inc.
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About Your Debt Management Plan (DMP)
Can
I get legal advice at CCCS?
No. We are consumer credit counselors
- not attorneys. We can tell you what some of the effects of non-payment
and bankruptcy might be. If you are considering any sort of legal
action, including bankruptcy, make an appointment with an attorney
(preferably one who charges no initial consultation fees).
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Can
you tell me the best places to shop or where to get the best service
for my money?
Unfortunately, we cannot. Because
of our position as a non-profit consumer credit counseling service,
we run the risk that any suggestion of where to go to receive services
will be interpreted as endorsement. Rather, your counselor may direct
your search with important questions to ask. We may tell you to
consult an attorney and preferably one that does not charge initial
consultation fees, but we can't tell you which one to go to.
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When
I sign the Authorization and Release form what am I signing?
The Authorization and Release
form is not a contract. The debt management plan is voluntary and
may be terminated by you at any time. The form does disclose to
you the amount we expect should be paid to your creditors each month
through CCCS and what portion of that amount will come to CCCS as
a monthly fee. The amount of your monthly payment may change upon
return of rejected proposals but any change will be discussed with
you. Additionally, the form details what we expect of you, including
the promise not to use additional credit and to monitor your plan
to determine on an ongoing basis if it make sense to continue. Please
read it carefully before continuing with your debt management plan.
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When
a debt management plan is set up who must sign their names?
Anyone who is a party to the
debt management plan. If it is you alone then your signature alone
will suffice. If any of the debts in the plan include anyone else
we need to have their signature as well.
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Where
do I take my budget from here?
Use it! The budget that you
have developed with your counselor is your road map to a more stable
financial future. You will see from the Confidential Client Information
Form that the budget contains money for things that may occur at
some unknown date in the future - auto repairs for example. So,
when you call your counselor and say you can't make this month's
payment, your counselor may ask you what happened to the money you
were going to hold aside. Remember, CCCS offers evening budget classes
that are free of charge to you. All you need to do is call and register.
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What
will happen to my credit if I go through CCCS?
Because the status of your credit
report is the domain of individual creditors we can't say and cannot
be held responsible. What we can say about the matter we can say
only from our experience. This is no guarantee. The fate of your
credit report is also a function of where it is now. In other words,
it could improve, it could get worse, or it might remain the same.
As you consider this question, you may want to take into account
what might have happened to your credit report had you not embarked
on a debt management plan. If the answer is that you would be better
off without CCCS then it would be wise to reconsider your participation
in the debt management plan. To know more about what to do if negative
marks appear on your credit report during the debt management plan,
see the question: "What
should I do about negative marks on my credit report that were posted
after I entered the plan?"
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Can
I leave the debt management plan if I want to? How do I do it and
what will happen with my accounts?
Absolutely - but, we hope you
don't. When you sign on to a debt management plan you are giving
us permission to interact with your creditors on your behalf. This
statement, called the Authorization and Release, also outlines what
we expect of you during the life of the plan. What you are signing
is not a contract. You may leave the program at anytime by simply
notifying us. Occasionally, individuals will leave our service by
simply severing contact. When this happens, it confuses all involved
and forces us to close your account as a failed plan (since we don't
know otherwise). After the closing of your plan, your creditors
will be notified of your status and asked to contact you directly.
What happens then? We hope you will take the initiative in contacting
your creditors. Your creditors will then change your status to a
normal account (at which point any concessions may be withdrawn
for the normal fees) or the creditor will consider the account in
default and may proceed with further collection activities. Your
immediate contact with the creditors is important since it may help
to determine what will happen with your accounts.
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Do
I have to put all my debts into a DMP?
Typically, yes. However, there
are some exceptions. During the course of a debt management plan
it is important that you cease using credit. Accounts are usually
closed upon the creditor's receipt of a proposal. Therefore, we
do not want to leave any accounts with you that can be used for
additional credit. Are there exceptions to this? Yes. If your job
requires travel you may keep a credit card for the purpose of business
related travel. You are permitted to keep that account on the understanding
that the balance will be paid in full each month. Other accounts
typically removed from a debt management plan include payments for
secured loans (cars, mortgages…etc.) since, as a rule, the
payment amount is not negotiable. Taxes are also removed simply
because CCCS usually cannot accomplish more than the client can
by dealing directly with the taxing body. And, last but not least,
payments on debts owed to friends and family members are typically
left out of the plan.
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Under
what circumstances will you discontinue my plan?
We would like to say that your
plan will only be discontinued when you "graduate." However,
we know this isn't always possible. So we must discontinue plans
when they no longer serve you. This is likely to be the case when
the payment history is such that the creditors have already removed
you from their plans. Those instances are defined by the National
Foundation for Consumer Credit as when the first payment in the
plan is not made, two payments in a row are missed, four payments
in a 12 month period are missed, when partial payment history is
such that it is equal to or less than 1/2 of the full payments in
a year's time or because of violations in our agreement with you.
CCCS does reserve the right (as do you) to terminate any debt management
plan at its sole discretion.
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Can
the amount I pay each month change?
Unless you have been told otherwise
by your counselor, your debt repayment schedule has been developed
to include fixed payments throughout the life of the plan. When
smaller balances are paid off, those payments are applied to the
remaining debts to accelerate the repayment rate. We call this "rollover."
However, it is possible that during the course of your debt management
plan you may face financial hardship requiring reassessment of the
plan. When this happens you will consult with your counselor and
determine if you may reduce the amount being sent to your creditors
or if it is beneficial to continue the plan. On the other hand,
if you receive additional income, we can disperse more to your creditors.
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Do
you hold money from month to month?
Typically, no. This agency is
committed to disbursing funds as quickly as possible after they
are put into the account and within the boundaries of the payment
cycle. However, we will hold funds with your specific instructions.
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If
there are a couple of days between when we pay in to the plan and
the date checks are sent to the creditors why can't I bring in my
money a day late and still have it go out?
When CCCS receives its payments
from clients it's objective is to turn around and pay those creditors
as soon as possible. Since not every client pays exactly the amount
they are expected to, the counselors spend a couple of days justifying
accounts and running lengthy reports. This means that there may
be little leeway in getting your payment in before the irreversible
parts of the process. Check with your counselor.
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If
I make a payment to you and then decide I need the money back for
a particular expense will you send the money back to me?
Maybe. Our goal is to send the
money to creditors as soon as possible after receiving it from you.
If we still have your money order we can sign it back over to you.
If it has been cashed we can send a check to you. In these instances,
you will receive a letter notifying you that a payment has been
missed and its consequences. If your money has already been printed
in a check to the creditor, CCCS will not put a stop payment on
the check in order to reissue the funds to you. Once a check is
printed to the creditor, it belongs to the creditor.
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How
do you negotiate with my creditors?
Once we have your signed permission
to proceed, we contact your creditors with written proposals. The
proposal, which is sent to each creditor, contains some general
information and some specifics about your situation. Among the items
you will find in a proposal are: your name, address and account
number, your monthly net income, monthly living expense, total debt
owed, amount paid on that debt, the amount owed to the creditor
receiving the proposal, the amount we propose to be paid monthly
to that creditor, and how many creditors there are. Once the proposal
is sent out we wait to hear back about whether or not the creditor
accepts the terms and if there will be any concessions and fee abatements.
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What
happens if one of my creditors rejects a proposal?
Typically creditors do accept
proposals. Occasionally they won't. When creditors reject proposals
it is usually because they want larger monthly payments in return
for interest or other concessions. In this case, your counselor
will contact you to see if a larger payment can be made. If it is
not possible to increase the payment, the counselor may decide,
in cooperation with you, to send the payments anyway to create a
"good faith effort" to repay the debt, with the payment
increase coming at a future date when you have more income or another
debt has been paid off. This means that particular account balance
may not go down until the payments are increased. Other debts may
be secured by a vehicle or some other item you own and the creditor
simply refuses to accept anything less than full payment on the
debt and they would prefer that payment to come from you. When that
happens your counselor may decide that it would be better for you
to assume that portion of the debt management plan. Some small local
creditors don't understand the role that CCCS plays in the debt
repayment process. When we get this response, our first goal is
to introduce ourselves to the creditor and explain our work. Occasionally,
collection agencies who are collecting for one of your original
creditors are afraid that their collection efforts will be reduced
to a drawn out four year plan or they are afraid that we will attempt
to have the original creditor recall that debt from their offices,
thereby denying them an opportunity to collect themselves. Rejecting
our proposal allows them to continue with dunning phone calls. The
reasons for rejected proposals can be many. In any case, your counselor
will decide with you on a strategy for dealing with them.
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My
creditors called and said I am no longer on the plan. Is this true?
If you have missed payments
you may no longer be on their plan. This means that they may be
accepting payments but not granting any concessions. If you hear
this from a creditor please notify your counselor immediately. If
we terminate your plan (as we must under certain circumstances)
you will be notified in writing before we notify the creditors.
This will give you the opportunity to appeal the termination or
win reinstatement.
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About Your
Creditors
Will
my creditors know I have an appointment?
They won't unless you tell them.
Often a creditor will stop calling once they know an appointment
is made with CCCS. The creditor, however, may want to know when
the appointment is and may call you afterward to find out about
the results. Since, in your case, a debt management plan has been
established, you may refer them directly to us about the particulars
of your financial situation.
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Someone
told me that if I went to CCCS that the creditors have to do whatever
you tell them. Is this true?
No, this is not true. The creditor's
only obligations are bound by what the law says they can do (Fair
Debt Collection Practices Act) and whatever it is that you agreed
to under the terms you accepted when you took advantage of the credit.
Any abatements, concessions, or other benefits awarded to you under
the debt management plan come to you as a voluntary act of the creditors.
Any benefits you receive from the creditors under this plan are
not entitlements but, rather, privileges.
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Are
most creditors willing to work with your agency?
Yes, most creditors support
the agency services. The key word here is "most." Some
creditors say they will not. When this happens, we make our best
effort to inform them about how we can work together to everyone's
advantage. If this fails, we attempt to send the money to see if
they will accept it and apply it to the proper account. If they
return the check uncashed, we will contact you about the next steps
in the process. Additionally, many creditors work cooperatively
with CCCS out of the knowledge that this may be the only way they
will see repayment of the debt owed to them.
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Why
will creditors reduce payments through your agency but will not
work directly with me?
Our agency has trained counselors
who evaluate your overall financial situation. Because we help you
come up with realistic options to solve your particular financial
problem, creditors will work with us and, through our agency, with
you. (from NFCC Q & A)
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Do
you work for the creditors?
No. While the majority of our
funding comes from the creditors we are committed to working toward
the successful reduction of debt that will benefit all parties involved.
This means that we will strive to develop plans that are affordable
to you but also meaningful to the creditor. If certain minimum payment
goals are met and the proposals are accepted, many creditors are
willing to give interest and other abatements. At the same time,
the Federal Trade Commission has also determined that there are
circumstances under which a debt management plan should not be attempted.
To be successful, we must create a plan that will make you, the
creditors, and our supervising bodies happy. In short, we work for
the process of debt repayment.
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Can
you stop legal action and collector phone calls?
In a majority of cases, we are
able to work with creditors to develop a solution that will satisfy
everyone and generally stop any legal action. If you maintain your
payment arrangements with us, the majority of phone calls will stop.
Since you are still responsible for your debts, some calls may continue.
(from NFCC Q & A)
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When
I told my creditors that I was coming to you some stopped calling
immediately but others said that they didn't work with you. Why
is this?
Remember that in most instances
you are dealing with a collector - either inside or outside the
company. The goal of that collector is to get you to pay them in
full rather than go on a protracted debt management plan. In some
instances, it is true that the company/creditor does not cooperate
with the debt management plan. In these instances, our strategy
is to continue sending payments to develop a demonstration of good
faith.
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Will
all my creditors drop interest and late charges?
Not necessarily. Any concessions
granted by your creditors are done so voluntarily. Some creditors,
to encourage you to complete the debt management plan, are very
generous - going as far as to remove all interest, late and over-limit
fees. Some will reduce interest and some will not. Most creditors
will either waive late charges or re-age the account to prevent
further delinquency. Again, not all creditors will do that. Those
who do offer concessions may not do so until the third consecutive
payment has been made. Most creditors will withdraw concessions
if one or more payments are missed or if there is a history of reduced
payments. So, it is critical, once you have secured concessions,
to make full and consistent payments each month.
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About Life
After Debt
What
should I do about negative marks on my credit report that were posted
after I entered the plan? Do you have any plans for credit recovery?
It is possible that your involvement
with a debt management plan will result in some negative marks on
your credit report. For this reason, CCCS takes no responsibility
for the condition of your credit report. Generally, creditors tend
to note the accounts favorably as long as payments continue uninterrupted.
Other creditors (typically smaller financial institutions) may find
that they can only grant interest concessions if they charge off
the debt. In any case, CCCS works to help put individuals back on
track to the wise use of credit. Several national creditors will
grant new credit to our clients upon graduation (provided that they
have a copy of a letter from CCCS noting the completion of the debt
management plan and an application coded from our offices). Often
mortgage companies, understanding that financial problems are present
in the lives of many, will use CCCS as the credit reference for
a mortgage application. When approaching the completion of a debt
management plan, talk to your counselor about strategies for credit
in the future.
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