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WHAT IS A DEBT MANAGEMENT PROGRAM
- Drowning in Interest Rates?
- Making only minimum payments?
- No extra money?
- Tired of creditors always calling?
- Do you see no end to it all?
A Debt Management Program (DMP) is a tool available to help those drowning in unsecured debt wade their way to shore. A DMP allows you to:
- Lower monthly payments
- Eliminate or reduce interest rates
- Eliminate late fees and over limit fees
- Stop harassing phone call
- Bring delinquent accounts current
- Avoid Charge-Offs/ Bankruptcy
- Depending on the creditors, you can consolidate all debt payments into one monthly payment.
Contact us at 1-877-929-2378 to schedule an appointment to meet with one of our counselors to see if a DMP is right for you.
FAQS ABOUT DMP
- How are you funded?
- How long does a counseling session take?
- What will happen during my counseling session?
- How can I make my monthly payment to Best Credit Service, Inc.?
- What debts can be included on a DMP?
- Are there fees for joining a DMP?
- Will my creditors know I am with Best Credit Service?
- Why will creditors work with Best Credit Service?
- If the interest rate is reduced, could the monthly minimum payment also be reduced?
- How long will the adjusted interest rates last?
- How can I make sure that the interest rate is reduced after joining a Debt Management Program?
- Do all creditors adjust interest rates?
- Is the adjusted interest rate the same for all creditors?
- Can I continue to use my credit card after the interest rate is reduced?
- When will I know my finalized interest rates?
- Is the interest lowered for all debt?
- How will the closing of my accounts report on my credit report?
- Does being on a Debt Management Program affect my credit score?
- Do you report to the credit bureaus?
Q. How are you funded?
A. Best Credit Service is funded through two sources. 1) Client Fee. $10 for the first $10K handled, and then $1 per $1,000.00 worth of debt after that, capped at $40. 2) Fair Share. Our major source of funding, is voluntary fair share contributions from your creditors. BCS works with all agencies regardless of their participation with voluntary fair share contributions.
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Q. How long does a counseling session take?
A. Depending on your bills and ics that need discussing, we can give you an estimate in as little as 30 minutes. However, the average session lasts approximately 60 minutes.
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Q. What will happen during my counseling session?
A. Financial counselors will review or help you create a budget, discuss your financial goals, and evaluate your debt. It will help speed the counseling session if you have your most recent statements available for the debts with which you need help. If you qualify for a debt management program, then we will discuss the program at that time.
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Q. How can I make my monthly payment to Best Credit Service, Inc.?
A. Due to an abundance of bounced checks and a 10-day mandatory waiting period on personal checks, we require that you make your payments by cashier's check or money order. This allows us to apply your payment immediately. You may incur a small fee at your financial institution for these types of checks. We also offer the ACH (National Automated Clearing House Association) system for making payments. This system allows us to automatically draft your checking account at a set time each month. Our company will pay any fee to set up your payment on ACH.
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Q. What debts can be included on a DMP?
A. Best Credit Service can consolidate unsecured debt, such as payments to banks, credit card companies, and medical debt.
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Q. Are there fees for joining a DMP?
A. There are no fees for joining the Debt Management Program.
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Q. Will my creditors know I am with Best Credit Service?
A. All consultation is kept private from your creditors until you choose to sign up. All consultation prior to your decision is private.
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Q. Why will creditors work with Best Credit Service?
A. Most creditors are willing to work with us because we are able to work with you. Through our Debt Management Program, creditors have a better arrangement for receiving payments, and you have better arrangements for making payments. Because we meet creditor's requirements for doing business, they are not only willing to work with you through us, but they will also fund our program through fair-share contributions.
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Q. If the interest rate is reduced, could the monthly minimum payment also be reduced?
A. Often it is possible to get some reduction, but it depends mainly on your creditor's policies.
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Q. How long will the adjusted interest rates last?
A. Creditors sometimes change rates as they modify their policy. However, if you skip two consecutive payments or cancel your program, the interest rate will return to its original rate.
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Q. How can I make sure that the interest rate is reduced after joining a Debt Management Program?
A. Your creditors will continue to send your monthly statements. The adjusted interest rate, adjusted payment, and balance is shown on these statements.
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Q. Do all creditors adjust interest rates?
A. Yes, except for a select few, who will still work with us on other benefits like waiving over limit fees, late fees, and re-aging the account.
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Q. Is the adjusted interest rate the same for all creditors?
A. No, it varies from creditor to creditor. The usual adjusted interest rate offered by the major creditors ranges from 0% to 15.9%.
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Q. Can I continue to use my credit card after the interest rate is reduced?
A. No. Those credit cards on a Debt Management Program will be closed automatically. The interest rate cannot be adjusted on an open account.
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Q. When will I know my finalized interest rates?
A. It depends on your creditors. Most creditors apply the adjusted interest rates after they receive the first payment. However, some creditors don't apply the adjusted interest rates until after three consecutive timely payments are made.
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Q. Is the interest lowered for all debt?
A. No. It is available for department store cards and some unsecured personal loans. Collection accounts sometimes lower interest rates. Medical bills with the original creditor have no interest charged until they are sold. Lower interest rates are also not available for secured loans (mortgage, car loans). The policies on the individual unsecured loans vary, so consult your counselor.
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Q. How will the closing of my accounts report on my credit report?
A. Closed accounts are reported on the credit report in two ways. One is "Closed by Consumer" and the other is "Closed by Grantors".
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Q. Does being on a Debt Management Program affect my credit score?
A. While being on the program does not affect your credit score, the initial closing of your accounts does. Closing your accounts is required by creditors in order to place them on a Debt Management Plan.
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Q. Do you report to the credit bureaus?
A. Best Credit Service does not report to the credit bureaus. However, some creditors may report your account as "Account Closed by Grantor" or "Being Managed by Consumer Credit Counseling" while others don't report to the credit bureaus at all. Depending on your prior credit history, this notation shouldn't affect your ability to obtain secured debts, such as a house or a car, but you may not be able to obtain any new unsecured debt, such as credit cards, while on the program. Most creditors will remove this "Credit Counseling" tag upon completion of the program. BCS's Debt Management Program offers lower finance charges to achieve debt reduction rapidly thus improving your debt-to-income ratio. Your credit should improve significantly after making consistent, on-time monthly payments with each year on the program.
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