FAQs About CCCS Creditors & Your DMP

Table of Contents

Maria 2005

  • About Consumer Credit Counseling Service
  • What does your agency do?

    The purpose of Consumer Credit Counseling Service is three-fold. First, we want to provide accurate and useful information to people about credit and money management in order to promote the wise use of money. Second, CCCS works with individuals to help them develop a workable personal budget that will succeed over the long haul. Last, CCCS strives to facilitate an alternative to personal bankruptcy through the establishment of debt management plans that will be both affordable to the individual and meaningful to the creditor.

  • Are you a government agency?

    No, we are not. Consumer Credit Counseling Services of Central Pennsylvania is a program of Tabor Community Services, a private 501 c (3) non-profit organization that has been serving the area for over 40 years.

  • Is the information I give to CCCS confidential?

    Absolutely. Unless you have told someone 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 the arrangement and, in so doing, notify them of your circumstances. This is one of the purposes of having you sign the Authorization and Release. In addition, this agency is also bound by the requirements of the Gramm-Leach-Bliley Act requiring us to keep your non-public information private unless we are given permission to share it. You will be reminded of this pledge at least once a year through our monthly client newsletter.

  • What are the qualifications of your staff?

    When we hire staff members we look for formal or informal training in individuals that gives them an aptitude for working through complex financial problems. In addition, most, if not all, of our counselors are certified by the National Foundation for Consumer Credit. Those counselors not yet certified must do so within a specified period of time and their work is carried out under the supervision of a certified counselor.

  • 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 monthly charge that is necessary to service your account. This charge is based on income guidelines and ranges between $5 and $20/month. In addition, there is a one-time set-up fee for debt management plans of $35. On some occasions, these monthly and/or set-up fees can be waived.

  • Where do you get your funding?

    Our funding comes from three main sources:
    1) 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.
    2) Charitable contributions from the community
    3) Monthly fees paid by our clients on debt management plans.

  • If I have a complaint, what is the grievance process?

    If you have a complaint, we ask you to work with your counselor to achieve a satisfactory solution. If this cannot be accomplished, ask your counselor to send you the grievance form. Once received, 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 to the Continuous Quality Improvement Committee of Tabor Community Services in writing. If a satisfactory solution is still not found you may appeal to the board of directors of Tabor.

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  • About Your Debt Management Plan (DMP)

    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).

  • 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 you to an industry with certain qualifications or 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.

  • When I sign the form what am I signing?

    The form (Authorization and Release) is not a contract. The debt management plan is voluntary and may be terminated by you at any time. The form does disclose the amount you should pay 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 if it is working for you. Please read it carefully before continuing with your debt management plan.

  • 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.

  • What do I do with my budget?

    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 information printout you received at the end of your appointment, that the budget sets aside 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 months payment because of an auto repair or because your quarterly auto insurance payment is due, your counselor may ask you what happened to the money you were going to save for a "rainy day". Remember, CCCS offers evening and morning budget classes which are free of charge to you. All you must do is call and register.

  • What will happen to my credit if I go through CCCS?

    According to the Consumer Law Center, "Although some creditors do disclose to credit reporting agencies whether a customer is participating in a debt management plan, this won't necessarily have a negative effect on your ability to get credit in the future. Fair, Isaac and Company, the developer of credit-scoring software used by all major credit reporting agencies, says that it does not negatively score a consumer's participation in a debt consolidation plan. On the other hand, individual creditors that pull your entire credit report may consider your participation as a negative factor if you apply for credit after you enter the plan. Moreover, if you are considering credit counseling because you have already fallen behind in paying your debts, your credit score has likely already been negatively affected."

    In short, 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 offer 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?"

  • 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 any time by simply notifying us. This is also a good time to remind you to notify us of this when it happens. 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). Within 30 days of 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 and interest rates) 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.

  • 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 also left out of the plan.

  • 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 a partial payment history is such that it is equal to or less than 4 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.

  • Can the amount I pay in 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.

  • Do you hold money from month to month?

    Generally, no. CCCS of Central Pennsylvania will disburse all funds in your account within each disbursement cycle - regardless of the amount. This agency is also committed to disbursing funds as quickly as possible after they are put into the account and within the boundaries of the payment cycle. However, at the request of the client, funds can be placed on hold toward a future disbursement date.

  • 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, its 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 (and we mean lengthy) reports. This means that there may be little leeway in getting your payment in before it is too late. Check with your counselor.

  • Can I bring my payment to you in the form of a check or in cash?

    No. Unfortunately, we are unable to accept payments in the forms of cash or personal checks. We cannot be responsible for "bounced" checks and the odds that we will experience a few of these over the tens of thousands of payments we process is quite significant. At the same time we are wary of accepting cash. Cash is much harder to trace if it is lost and the security risks of holding tens of thousands of dollars in cash on the premises are substantial.

  • What payments will you accept?

    This agency will accept payments in the form of money orders, certified checks, cashiers checks, and ACH. ACH stands for Automated Clearing House. It means that once a month, with your permission, we go into your bank account and withdraw the money electronically. Even though the setup and administration of these accounts represent a cost to us, we offer it at no charge to our clients.

  • How do I sign up for ACH (Automated Clearing House)?

    Tell your counselor you are interested. Your counselor will give you the necessary papers to sign up. The requirements (this is the fine print) are as follows:
    1. Any client of Consumer Credit Counseling Service of Central Pennsylvania (CCCS) may apply for the service of having their monthly payments made electronically through Automated Clearinghouse (ACH).
    2. CCCS will offer this service without charge to the client, except under the circumstances described in this policy.
    3. CCCS will conduct these transactions under the regulations and requirements of ACH.
    4. Electronic transactions will be initiated by 12:00 noon on the date scheduled. All time-limit requirements such as "business days" or "business hours" will be measured from this time.
    5. The client will apply for service in writing and within a time period greater than four (4) business days from the date of first withdrawl.
    6. Only written change orders will be accepted for modification or termination of electronic transactions and only if they are received at least 72 business hours in advance of the transaction.
    7. If transactions are returned for insufficient funds, rescinded agreements, and/or stop payments at the bank, the client's electronic payment option will be canceled by CCCS. Written explanation of cause must be submitted to case manager in order to resume the electronic payment option.
    8. If CCCS determines that a client has excessively used the change order system to customize electronic payments, that client may be terminated from the electronic payment service and may not reapply for the service until twelve (12) months of full and uninterrupted payments have been made.
    9. CCCS reserves the right to unilaterally terminate the electronic payment agreement at any time for any reason.

  • 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 deposited in our bank, we can send you a check with 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. How do you negotiate with my creditors?

    Once we have your signed permission to proceed and your first payment is in house, we contact your creditors with written or, in some cases, electronic 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 & 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 from them whether or not they accept the terms and if there will be any concessions & fee abatements.

  • 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 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 is 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 it 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 on a strategy for dealing with it.

  • 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 15 days before we notify the creditors. This will give you the opportunity to appeal the termination or win reinstatement before contact with the creditors is severed.

  • What if my payment from CCCS does not arrive on time with the creditor and there are late charges?

    CCCS notifies creditors at the time proposals are sent that payments will be issued by this office by the 25th of the month. Typically, payments are sent out between the 17th and the 20th. And, the majority of your interest-charging creditors are paid quickly through electronic funds transfers (EFT). However, the danger that a check you send the creditor will get lost or delayed in the mail is the same for CCCS. Occasionally, the check is held up at the creditor's offices and not posted (we have found out, in isolated cases, for up to three weeks!). Because of this, CCCS takes no responsibility for the timing of the arrival of the check once it has left its offices. If a check has not been cashed at the end of 90 days, the appropriate accounts will be credited and a new check issued.

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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.

  • 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. Are most creditors willing to work with your agency?

    Yes, most creditors support our 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.

  • 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.

  • Do you work for the creditors?

    No. While the majority of our funding comes from 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.

  • 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 & 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.

  • 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.

  • 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 & 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 the track to the wise use of credit. Several national creditors will grant new credit to our clients upon graduation. 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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