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Frequently Asked Questions

I hear that I should get my credit report at least once each year. How can I do that, and what if I donít understand what it says?

I have negative information on my credit report. Can you remove it?

The debt collectors call me constantly. Can you do anything about that?

My creditor said my account was charged off. Does that mean I no longer have to pay the debt?

What is a judgment?

I have built up some equity in my home. Should I use it to pay off my creditors?

A debt consolidation loan sounds like it would solve all my problems. I could pay off all of my bills, have a lower monthly payment to the bank, and at a lower interest rate. Is this a good idea?

Iím recently divorced. The judge split up the debts, but my ex isnít paying. Am I responsible for those debts assigned to him?

What if I donít have debt, but need help in other financial areas?

Iím behind on my mortgage. Can CCCS help?

What does CCCS do?

What is a Debt Management Plan?

Do you have any programs for a first-time homebuyer?

If Iím in debt, what are the benefits of working with CCCS?

What if my creditor doesnít want to make a contribution to your agency? Can you still pay out my debt to them?

Do I have to have a minimum amount of debt to use your services?

How is a Debt Management Program different from filing Chapter 13 bankruptcy?

If I go on a Debt Management Plan, how long until Iím debt free?

If I go on your Debt Management Plan, will I ever be able to get credit again?

I have never had a credit card, but many say it is a necessary part of life. Where do I start?

Will going on a DMP adversely affect my credit report?

Iíve heard bad things in the news about debt counseling agencies. How is CCCS different?

How can I be sure your company is reputable?

How much does it cost to use your services?

I'm unemployed which means money is tighter than ever. Is there anything you can do for me?

Do both spouses have to agree to attend the counseling session?

How does your agency make money? How are you funded since youíre non-profit?

Will all of my accounts be closed if I go on a DMP?

I hear that I should get my credit report at least once each year. How can I do that, and what if I donít understand what it says?

Frequently reviewing your credit report is good advice. There are three major credit bureaus, and you can obtain a single report from each, or a report that merges the information of all three. Or, for help interpreting the information contained in your credit bureau, schedule a Credit Report Review appointment with a CCCS counselor.

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I have negative information on my credit report. Can you remove it?

The purpose of a credit report is to present an accurate picture of your credit history to anyone with a permissible purpose to view your report. If there is negative information on your report, but it is true, it needs to stay. Of course, if the data is false, then you need to file a dispute to get it removed. Stay clear of any outfit that claims they can ďfixĒ your credit report. Only time and a good pay history can do that.

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The debt collectors call me constantly. Can you do anything about that?

The Fair Debt Collection Act protects consumers from abusive collection practices. Talk to your CCCS counselor to see if the collectors are crossing the line. The best way to stop collection calls is with consistent monthly payments. In other words, money talks! CCCS will work with your creditors to establish a repayment plan that you can live with. But, even on a debt management plan, you must know that the original contract between you and your creditor is still valid.

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My creditor said my account was charged off. Does that mean I no longer have to pay the debt?

When an account is charged off, it is considered to be a debt that is no longer collectable. All creditors have different policies regarding the timeframe within which they charge off an account, but it is generally between 90-180 days after you become delinquent. Nonetheless, you are still morally and legally responsible for the debt. As a matter of fact, the creditor often steps up his collection efforts after an account has been charged off. You may begin receiving calls from a professional debt collection agency, and if reported to the credit bureau, your credit report will move into a more negative status.

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What is a judgment?

A judgment is a decision issued by the court at the end of a lawsuit. If you are sued and either donít file the appropriate papers or file papers but eventually lose the case, the person initiating the lawsuit may be awarded a judgment against you. If you choose not to appear in court on the appointed court date, the creditor may be awarded a default judgment. Either way, you may be responsible to pay the judgment, and your credit report will undoubtedly be negatively affected.

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I have built up some equity in my home. Should I use it to pay off my creditors?

There are some positive things about a home equity loan. However, you should consider the full picture before committing. For starters, consider the fact that when you take out a home equity loan you are putting up your most valued possession, your home, as security for a debt that was originally unsecured. Youíve taken out a loan against your house. Youíve turned unsecured debt into secured debt. Then, if you miss what was formerly your credit card payment, youíve now skipped a mortgage payment, and you could risk losing your home.

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A debt consolidation loan sounds like it would solve all my problems. I could pay off all of my bills, have a lower monthly payment to the bank, and at a lower interest rate. Is this a good idea?

On paper a debt consolidation loan is perfect. And, in reality it can be if, and this is a big if, you donít continue charging. Old habits die hard, and if you are used to charging your purchases or living off of credit, then in a year or so, youíre likely going to have your bill consolidation loan payment plus more credit card payments. Not only are you back in the same situation, youíre even deeper in debt!

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Iím recently divorced. The judge split up the debts, but my ex isnít paying. Am I responsible for those debts assigned to him?

CCCS cannot give out legal advice. However, in practice we have observed that the creditor usually considers the person or persons who signed the original account contract to be responsible for the debt. Even if the divorce decree designates your ex as the responsible party, if you live in a community property state you are likely going to have to cough up the money to satisfy this debt or risk having your credit report affected.

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What if I donít have debt, but need help in other financial areas?

Realizing that consumers who are not in debt often have financial questions about other decisions, CCCS developed Life Events Counseling. In-depth materials were developed in areas such as Divorce, Identity Theft, Single Parenting, Buying a Home and Job Loss.

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Iím behind on my mortgage. Can CCCS help?

Absolutely. CCCS has been a HUD approved counseling agency for decades, and works with lenders everyday. Our trained counselors are experts in the areas of foreclosure prevention and loss mitigation. A house is normally a personís largest investment. Donít risk losing yours.

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What does CCCS do?

CCCS is a non-profit, community service organization providing financial education to consumers. Confidential financial counseling is offered in-person, online or by phone. A certified counselor works with the consumer to construct a realistic spending plan, and when necessary, a Debt Management Plan (DMP) may be developed to help satisfy monthly debt obligations.

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What is a Debt Management Plan?

The DMP is a program used only when the consumer cannot continue to meet debt obligations on his own. Sometimes, due to any number of different circumstances, financial responsibilities can spiral out of hand. Thatís when you need the professional help of CCCS. Your counselor will work directly with your creditors to create a repayment plan that often includes a lower monthly payment, stopped or lowered interest, late fees and overlimit fees. The result is an orderly debt reduction plan that you can live with. Once in place, you send the agreed upon amount to CCCS each month, and they disburse the payments to all of your creditors. You normally continue to receive the statements from your creditors, and CCCS also sends you a statement with each monthís activity outlined. If this sounds like the solution to your debt problems, contact us today.

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Do you have any programs for a first-time homebuyer?

Yes, we offer one-on-one counseling for a first-time homebuyer, or classes in a group setting. Either way, you are walked through the loan process, and taught what to look for in home all the way from the front curb to the backyard.

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If Iím in debt, what are the benefits of working with CCCS?

We have 30+ years experience ready to go to work for you. Our counselors will listen to your specific concerns, and then develop solutions to your particular needs. Your situation is analyzed, and you are provided in writing with a new budget and action steps to guide you down the path to becoming debt free. If you canít manage debt repayment on your own, the CCCS counselor will negotiate directly with your creditors to formulate a new, lower monthly payment. Often, interest, late fees and over limit fees are waived for CCCS clients, bringing the reality of a debt-free life even closer.

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What if my creditor doesnít want to make a contribution to your agency? Can you still pay out my debt to them?

Yes, CCCS works with all of your creditors regardless of whether they contribute to our agency. That is another difference between us and other credit counseling centers.

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Do I have to have a minimum amount of debt to use your services?

No. Whereas some agencies require a certain amount of debt or a minimum number of credit cards to be eligible, at CCCS we will advise you regardless of your income level or amount of debt.

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How is a Debt Management Program different from filing Chapter 13 bankruptcy?

Bankruptcy is a legal matter, and may be right for you. However, bankruptcy should be your last stop, not your first. It can stay on your credit record for up to ten years, and could make it more difficult to obtain credit in the future.

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If I go on a Debt Management Plan, how long until Iím debt free?

Most of our clients are debt free in 4-5 years after going on our plan. Contrast that with how long it takes to get out of debt at the rate youíre going now. For instance, the average American household currently has $9,000 in credit card debt. Assuming you make a minimum monthly payment of 2% of balance (which is standard) at an annual interest rate of 18% (pretty common), youíll have that $9,000 paid off in 47 years! And, thatís if you never charge anything else, and never miss a payment! Whatís perhaps even worse is that youíll have paid $32,994 for that debt, with $23,994 going into your creditorís pocket. Ouch!

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If I go on your Debt Management Plan, will I ever be able to get credit again?

Of course! Graduates of our program buy houses and cars everyday, not to mention being approved for credit cards. The creditors believe in our financial education, and support your efforts to honor your commitments to them. Naturally youíll need to have a steady income to be considered for credit, but thatís no different from any consumer applying for a loan.

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I have never had a credit card, but many say it is a necessary part of life. Where do I start?

We do live in a credit culture, no doubt about it. Credit is a convenience you might enjoy, but it is also a responsibility. Many a well-meaning person has had their financial future tarnished through the misuse of credit. When agreeing to extend credit to you, a lender normally considers your ability to repay and your willingness to repay. Your ability to repay is indicated by your income and stability. They generally like to see you at the same job and the same address for a minimum of two years. Your willingness to repay is demonstrated by how youíve repaid your past debts. You may have more of a credit history than you realize, as utility companies or landlords could have been reporting your payments to the credit bureau. To find out, request your credit report from Premier.

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Will going on a DMP adversely affect my credit report?

A credit report is a track record of your previous credit history, among other things. It shows how youíve repaid your debts in the past, including the good with the bad. If you are struggling to make ends meet, skipping some payments and being late with others, your credit report is already dinged. Nobody should consider going on a debt management plan who can successfully service his debts on his own. However, if you need a professional to intervene for you, turn to CCCS.

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Iíve heard bad things in the news about debt counseling agencies. How is CCCS different?

A true credit counseling agency like CCCS will offer multiple solutions to your financial needs. A debt management program will not be the first, or the only, option available to you. At CCCS, each client is treated as an individual with individual circumstances. We offer the solution that is best for you, whether it be a budget counseling session that allows you to continue to pay your debts on your own, a debt management program where we step in and negotiate a plan with your creditors, or ongoing financial education classes.

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How can I be sure your company is reputable?

You should research any credit counseling agency before agreeing to allow them to counsel you, and certainly before you send them any money. A good place to start is with the Better Business Bureau. However, even very good agencies can have a complaint filed against them, as that is the consumerís right. What youíll want to find out is how that complaint was resolved.

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How much does it cost to use your services?

Budget counseling is provided at NO CHARGE by a trained professional credit counselor. If you elect to join the Debt Management Plan to repay your creditors, there is a one-time set-up fee of $50. The monthly fee that covers the maintenance of your accounts, disbursements to your creditors, monthly statements and other administrative costs does not exceed $50.

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I'm unemployed which means money is tighter than ever. Is there anything you can do for me?

You sound like a perfect candidate for our Job Loss counseling. A trained counselor will walk you through the maze of government programs for which you may qualify, writing a resume, retraining, and job search tools. Meanwhile, a new budget will be developed based upon todayís income, a necessity for riding out the storm.

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Do both spouses have to agree to attend the counseling session?

Experience has taught us that it is best if both parties participate in the counseling process. However, work schedules and other conflicts sometimes prevent that. The important thing is that you address the problem quickly. So, donít let confusion over who is available to attend the counseling session delay you taking action.

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How does your agency make money? How are you funded since youíre non-profit?

Even non-profit organizations make money. After all, they need to pay their employeesí salaries and keep the lights on! Many entities believe in the services that CCCS provides, and agree to support our efforts. For instance, we receive grants from foundations or the government, as well as other community resources. The majority of our funding comes from the creditor who makes a voluntary contribution to us. Since creditors have a financial interest in getting paid, most are willing to make a contribution to help fund our agency. These contributions are usually calculated as a percentage of payments you make through your DMP, up to 15% of each payment the creditor receives. However, your account with your creditor is to be credited with 100% of the amount you pay through us.

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Will all of my accounts be closed if I go on a DMP?

The objective is to become debt free. That process is interrupted if charging continues. Your counselor works up a budget where you can live on cash. As odd as that might sound, itís entirely possible. Most creditors require that the account be closed, but understand that in todayís world of credit it may be necessary to leave one major credit card off the program for emergency use. You and your counselor can evaluate if that option is necessary for your lifestyle.

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