A debt management program (DMP) is a repayment plan where you make one convenient monthly payment to a credit counseling agency (CCA), and the agency distributes individual payments to your creditors in an effort to get your debt paid in full. Normally, with the DMP your creditors agree to provide benefits such as lower interest rates and lower payments which result in you getting the debt paid off quicker than you could on your own.
First, we’ll do a free debt analysis to determine if a Debt Management Program (DMP) is right for you. If you enroll in a DMP, you will make one easy, affordable monthly payment to us, and according to your plan, we pay all of the creditors you’ve enrolled. In many cases creditors provide benefits such as reduced interest rates, lower monthly payments and eliminating certain fees.
Your being successful on the debt management program depends on you staying committed to making your monthly payments, avoiding using credit cards or opening new card accounts and making wiser financial decisions. Specific guidelines will also be detailed in your DMP Client Agreement that you will receive and the good news is CESI is here to help you each step of the way.
CESI offers budget and credit counseling with a Certified Financial Counselor free of charge. During your online or telephone session, we’ll identify the root cause of your debt, review your income and expenses, and make a debt relief recommendation. If you qualify, one recommendation may be to join CESI’s Debt Management Plan.
If you decide to participate in our debt management program, there is an average one time set-up fee of $37, and an average monthly fee of $25. Regulations on fees vary according to the state you reside in, but fee do not exceed $75. Please contact us for the fees in your state.
Your monthly fee may be less than the standard fee, depending on your financial situation. CESI credit counselors may reduce or eliminate these fees depending on your ability to pay.
Typically, people who benefit from a debt management program are those who are getting collection calls, have fallen behind on their payments or have experienced a recent change in their financial situation. In some cases, they might be seeking an alternative to bankruptcy. We do offer a free financial assessment which will help to determine the best solution for your financial distress whether it be the debt management program or one of the other financial services that we offer.
A debt management program (DMP) is not a loan. A DMP may help you repay your debt in full while saving money on interest and late fees. Our Free Debt Analysis tool provides an estimate of what you could save on this program vs. paying debt off on your own
At CESI, we discourage our customers from obtaining a debt consolidation loan. We encourage clients to change spending habits, stop using credit cards and get out of debt, not further into debt.
CESI is not a loan company, so we do not charge interest. We work with your creditors to lower your existing interest rates and payments, and all interest rates while on a DMP are set by the individual creditor. On average, our customers receive a reduced interest rate on their unsecured debt of 9%-12% on the Debt Management Program.
There are many types of debt that can be included in a Debt Management Program. We are able to work with unsecured debt including: credit cards, collection accounts, personal loans, medical bills, department store cards, old utility bills, gas cards and repossessions. We are unable to included secured debt such as a home mortgage, or a loan for car, boats or motorcycle.
Unsecured debt is debt for which a creditor holds no collateral, such as credit cards.
No. Although some credit issuers will allow this, business credit cards are treated as secured debt by most creditors. Most creditors rely on your business financial statements in order to grant credit. Therefore, they do not allow you to include business debt in consolidation.
The purpose of our Debt Management Program (DMP) is to help you pay your outstanding debts. We cannot make any representation about any aspect of your credit record, credit score, credit history or credit rating. Depending on the circumstances, your credit can be enhanced, damaged or not altered at all. Since we do not report to the credit agencies it is beyond the control or scope of our DMP program to determine what your creditors may report. (Refer to the web site www.myfico.com to find out what is in your score and what is not).
The fact that you are in a debt management program may or may not affect your ability to be approved for a secured loan while you are enrolled on the program; it depends on the lenders. If you are considering applying for a home or auto loan, we suggest that you contact your bank or potential lender for the specific guidelines to qualifying for a loan.
It is important that you not accumulate new debt while participating in a debt management program. Because of this, to ensure your success, most creditors will require your account with them to either be closed or inactivated before they grant you benefits.
Yes. A counselor can help you to examine your monthly expenses and formulate a monthly budget. If you qualify for a debt management plan, all of your unsecured debts can be paid from automatic deductions from your checking or savings accounts on the day that you choose. By consolidating your payment dates to one day of the month, you will be able to plan a more efficient and effective monthly budget.
No, you do not have to be a homeowner to enroll on a debt management program.
Collection calls may continue until the creditor has received the third consecutive payment through the program under an accepted proposal. Also, the collection agent may not be aware of a proposal from our program until the benefits are granted. Therefore, if you are receiving collection calls, or letters from creditors after you have enrolled on the debt management program, please advise them to call our Creditor Services department at 1-800-778-4851
To enroll in a CESI debt management program, call us toll-free at 888-919-CESI
Like any other business, although we are non-profit, we still have expenses that we must cover. To ensure we are able to continue to provide A+ service to our clients, it’s important that everyone who benefits from our services also contribute. However, we do have a hardship program in which fees may be reduced or in some cases eliminated to ensure the overall success of our clients.
Yes, you can. If you decide to pay off any accounts, please call our Client Care Center. They will contact your creditor and advise you of your balances.
A settlement is an offer to take partial payment on a balance to close an account. The payments are usually requested in one lump sum. A settlement may reflect negatively on your credit report, and the unpaid balance may be reported as taxable income or sold to a collection agency. CESI does not recommend debt settlement unless there are no other suitable options.
Upon receiving your signed client agreement and advanced pay debit form, we will notify your listed creditors that you joined our debt management program upon your first payment. This notification, called a “proposal,” includes the account number and open balance you provided at the time of set-up as well as the CESI payment amount indicated on your repayment schedule.
Creditor benefits are based on consistent and sufficient payments throughout the duration of the program. However, after receipt of three consecutive, monthly payments on your debt management plan under an accepted proposal, your creditors begin to recognize your commitment to the program and often offer benefits, which may include: acceptance of the proposed payment amount, a reduced interest rate, elimination of late fees and/or over-the-limit fees.
Yes, you can. However, your creditors expect to receive a payment every 30 days. Changing your debit date can negatively affect your payment cycle and any benefits granted by creditors. You should contact us immediately when you realize that you may have difficulties in making a program payment on time.
Since we do not receive copies of your creditor statements, you should confirm that each of your creditors continues to provide monthly statements. CESI will also provide a monthly statement, showing the disbursement of payments to your creditors. Each month, you should compare both statements to ensure that your payments have posted accurately and report any discrepancies.
That’s great! You’re encouraged to increase your payments whenever possible. You can choose to increase a payment one time, or permanently. If you would like to pay off an account, just contact our Client Services Department at 1-866-635-7120 with the payment amount, and we will adjust your next payment to include the one-time payoff amount.
Some creditors will require that you include all of your eligible unsecured debt on the program, and those accounts will be closed or inactivated. By not including all of your unsecured debt or opening any new accounts, you could risk losing your benefits from creditors.
You can access and make changes to your account by returning to this website or by calling our Client Service Department at 866-635-7120.
When considering a credit counseling agency, you should be aware of what to look for and make sure to research the organization and ask questions when speaking with representatives of that organization.
When you call, you’ll talk to one of our certified personal financial counselors who will complete a financial assessment by asking questions about your current financial situation including your estimated income and expenses. During this phase of the consultation, your financial counselor will also determine your current spending habits by analyzing your budget to get a clear picture of your income versus your debt load. Your counselor will then re-examine your budget and offer suggestions on how to increase your disposable income. He or she will even provide you with an action plan as well as a copy of the new budget to guide you in making better spending choices. Once they complete the budget analysis, your credit counselor can assess your debts, expenditures and income. He or she will provide you with the debt management options available for your financial situation and will also help you decide which option is best for you. Once your financial assessment is complete, your counselor will present you with a few options that he or she feels may work for you and address the advantages and disadvantages of each option. Your counselor will then give you their recommendation of the option they feel will best fit your financial situation. If the recommendation is a debt management plan, and you’re interested in enrolling, then you will need to have your most recent creditor statements on hand. In order to provide you with a quote on what your debt management payment would be, your counselor will ask you for information about your unsecured debt. After the counselor enters your creditor information, you will receive a payment quote and an estimated payoff time. Then your counselor will send you documentation explaining the debt management plan and how it works. From this point, it is up to you to decide if you would like to enroll on the debt management plan. The enrollment process is simple and can be done via the Internet or fax.
When you enroll in a debt management program, you can pick the payment date that’s best for you and your creditors. You may choose any day from the 1st to the 28th of every month. You must choose a payment date within 30 days of enrollment for your first payment date.
One response to “Frequently Asked Questions”
[…] Frequently Asked Questions […]