Frequently Asked Questions:
Debt Management Program
A Debt Management Program is a plan designed for you to consolidate your unsecured debt into an affordable, one monthly payment through a credit counseling organization, and at the same time, find a solution to your financial circumstances.
In order to accurately answer this question, you must ask yourself the following:
- Are you able to pay at least the minimums on your credit cards?
- Are you ever late in paying your monthly bills?
- Are creditors and collection agencies calling and asking for payments?
- Are you unable to make payment arrangements?
If the answer is yes to any of the above mentioned questions, then DMP is the answer. You will benefit from lower monthly payments, reduced interest rates, no more fees or calls from collections agencies, and over time the credit score can improve due to consistent monthly payments to the creditors while reducing the debt at a faster pace.
- Regain control of your financial situation
- Create a household budget
- Consolidate your unsecured debt into one monthly payment
- Reduce interest rates
- Waive late and over limit fees
- "Re-Age" your account. Meaning that they will remove all the negative information surrounding late payments from your credit report. It will show as “current” instead of it showing that you were ever late
- Stop collection calls
- Become debt free between 3 to 5 years
A Debt Management Program assists you in paying down your unsecured debt in full. Regular monthly payments are made until the balances are paid in full. The length of a debt management program lasts anywhere from 3 to 5 years. The creditors agree to reduce monthly payments and/or reduce interest rates. The client no longer receives any collections calls and their accounts are no longer subject to being charge any late or over limit fees. In some cases, if a consumer is currently behind, after three months of consecutive payments on time, the creditor will update the reporting agencies of the consumer being current.
Debt Consolidation Loan, you can obtain a loan but first you would want to review how to qualify. Lenders usually offer these types of loans for large amounts. Typically if you have a large amount of debt, most likely you won’t qualify. But if you qualify, you will be required to use your house as collateral. Would you take the risk? Instead of reducing your debt you’re actually increasing, this is not what you need. You may end up taking longer to pay off your credit card debt compared to a DMP.
Usually, when you enter to a Debt Management Program, you will need to close your unsecured credit cards. This may cause a slight impact on your score; however you will improve your score if you follow the steps of the program by making monthly payments on time.
You will find a notation in your credit report stating your account is being handled by a credit counseling organization. This is removed once you completed the program, or you can contact the credit bureaus to remove mentioned notation.
Once all signed authorizations are received from you, Family Budget Services, Inc. (FBSI) will send proposals to the creditor on your behalf. The proposal will have a new amount of payment and reduced interest rate for each creditor. FBSI provides you with the most accurate information depending on creditor's guidelines.
On their own a client may take at least 10 years to pay off all of their unsecured debt. Utilizing a debt management program and benefitting from lower monthly payments and reduced interest rates; would enable a client to become debt free in 3 to 5 years.
The statements will continue to come to you. The statement will indicate the new lower payment amount and reduced interest rate once you start receiving the benefits of the program. Receiving the statements will also allow you to track the progress of the balances going down.
Once a monthly payment schedule has been established and the creditors are receiving the payments regularly on time, the phone calls from the creditors and/or collection agencies should stop.
You will need to contact FBSI at firstname.lastname@example.org or email your assigned account representative in order to help you with your request.
To receive immediate assistance, you can call us at our toll free number 1-800-511-5234.