Frequently Asked Questions
What are the benefits of working with CCCS?
Our certified credit counselors provide confidential services to meet your needs and get you on the road to financial freedom. Some of the benefits you may receive are:
- A better understanding of your options
- Improved financial skills
- Referral to potential helpful resources
- Assistance communicating with your bankruptcy attorney or lender
- Decreased creditor calls and waived late and over-limit fees
- Reduced payments, interest and finance charges
How much do credit counseling services cost?
As a non-profit agency, we often have grants to cover the cost of counseling, making our services available at no cost to you. No one is denied services due to inability to pay a fee. Our Debt Management Program does include a $50 set-up fee and a minimal monthly contribution fee. There are also fees for pre-bankruptcy counseling and education and credit report review.
Are creditors willing to work with CCCS?
Yes! Most creditors work with us and some even provide financial assistance. And even if a creditor refuses to work with us, we will still try to work with them to reduce your debt management plan payments.
How are you funded?
Most of our funding comes from client donations and fees. We also receive some voluntary contributions from creditors who participate in our debt management program. We get additional funding from private and governmental grants.
How does credit counseling work?
A certified credit counselor will review your financial situation in a non-judgmental manner and provide possible solutions. The counselor will make every effort to develop a personalized action plan that meets your needs.
Is credit counseling confidential?
Yes. Our counselors conduct all individual sessions in a private office. We also maintain all client records in secure facilities.
What is a Debt Management Plan (DMP)?
A Debt Management Plan is a schedule we create for you to repay your debts. By voluntary agreement, you deposit funds with our agency each month. Then we send those funds to your creditors. If collectors call, you can ask them to contact us. You may also receive a reduction or waiver in finance and/or other charges.
If I enroll in a DMP, can I continue to use my credit cards?
No. As a rule, your creditors will close or suspend your lines of credit. In limited cases, you may be able to keep one credit card out of the DMP, but such situations are rare and are evaluated on a case-by-case basis.
When you complete the DMP, some creditors may be willing to reestablish your credit based on your ability to pay and your payment history while enrolled in the plan.
How do I establish credit?
You need a steady work record and continued residence at the same address. If you do not have a checking account, open one and be careful not to bounce checks. You may also apply for credit at a local department store or credit union. Another option to consider is a secured card, which requires you to deposit money as security for the charges you make on the card.
Where can I get a free copy of my credit report?
You can get a free copy of your credit report every 12 months by contacting the three major credit-reporting agencies: Equifax, Experian and Transunion.
Can you fix my credit report or clean it up?
No. If negative comments on your credit report are correct, they can remain on your credit report for the legally allowed amount of time. This period is generally seven years, but there are some important exceptions. For example, a bankruptcy stays on your report for ten years, and a judgment stays on for seven years OR until the statute of limitations runs out.
How do I fix errors on my credit report?
If you believe there are errors in your credit report, you must dispute them with the credit bureau in writing or via their online options. The bureau will follow up on your request with your creditor. If the creditor agrees with you, then your report will be changed. If the creditor disagrees, then you may need to follow up further with the credit reporting bureaus.
What is the Fair Debt Collection Practices Act (FDCPA)?
It’s a federal law that protects consumers from harassment or threats made by creditors and prohibits creditors from making false statements. This law also prohibits a debt collector from disclosing what you owe to anyone but your attorney.
What is a “charge off?” If my debt has been “charged off,” can a creditor pursue collection?
To “charge off” a debt means to write it off as an uncollectible debt. Depending on each creditor’s policy, a “charge off” will occur between 90 to 180 days after you become delinquent. However, a creditor can still pursue debt collection after a “charge off,” and the debt will also be reported to the credit bureaus. You may still be charged interest and fees on the charged off debt. The debt might also be sold to another company.
My car was repossessed and resold. Am I liable for the difference between what the car sold for and what was owed?
Yes. If you do not pay, the creditor may initiate legal action for the difference between the sale price and what you owed.
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 don’t file papers or file papers but eventually lose the case, the person who sued you will get a judgment. Most creditors need a court judgment to garnish your wages or put a lien on your property. However, certain creditors do not have to go through the court judgment process to take these actions.
My wages have been garnished. What does that mean?
When your wages are garnished (or attached), a sum of money is deducted from your paycheck and sent to the creditor. Wage garnishments are a common method used to collect a court judgment or child support.
Can CCCS give legal opinions on my options?
No. Only an attorney can provide opinions about legal issues.
Who is responsible for debts after divorce?
You will need to talk to an attorney about this question.
What happens if I declare bankruptcy?
There are two types of bankruptcy available to most individuals: Chapter 7 and Chapter 13. Both types of bankruptcy may get rid of debts where creditors have no specific rights to property. Each type may also stop foreclosures, repossessions, garnishments, utility shut-offs and debt collection activities. Bankruptcy usually does not wipe out child support, alimony, fines, taxes and some student loan obligations.
How does the CCCS Debt Management Program differ from Chapter 13 bankruptcy?
Our Debt Management Program is voluntary for both you and your creditors. Therefore, all creditors may not waive interest. You will repay your debt in monthly installments that your creditor has agreed to. A creditor might report to the credit reporting bureaus that you are in a debt repayment plan, but this is not a factor in your credit score.
In contrast, when you file for Chapter 13 bankruptcy, the court will administer the plan and depending on the plan, you may or may not end up re-paying all the debt. The interest rate for unsecured debt is typically 0% in a Chapter 13 bankruptcy. You may also have more difficulty obtaining credit in the future because bankruptcy does affect your credit score. Any type of bankruptcy is a matter of public record.
How long does a bankruptcy stay on my credit report, and how does it affect my credit?
Under the Fair Credit Reporting Act—a federal law—a bankruptcy can remain on your credit report for up to 10 years and won’t clean up a bad credit record.
If I need legal advice on filing bankruptcy and don’t have the money to pay for an attorney, what should I do?
You can contact the local bar association, legal aid services or a university law school with a legal assistance program for a referral to an attorney. Free legal aid clinics service some counties, and you can contact one of them to see if they provide help with bankruptcies.