- Is it your best option? Before starting a debt management program, you need to go through a credit counseling session to determine what is your best option for getting out of debt. You can do online credit counseling or over the telephone. During credit counseling, you’ll provide information about your income, expenses and budget. A nonprofit credit counselor may pull a copy of your credit file to verify your total credit card debt.
- Receive a solution: After examining your income and expenses, as well as your overall debt situation, your counselor will provide you with a debt-relief solution. This solution may be a debt management program. However, if a debt management program is not the right solution, the counselor may refer you to debt settlement or a bankruptcy attorney.
- Contact your creditors: When you enroll in the debt management program, a credit counselor will contact your creditors and request participation in the plan on your behalf. At this point, your creditors may agree to grant you lower interest rates and possibly waive late fees or over-the-limit fees.
- Your payments are consolidated: On a debt management program, your payments will be consolidated into one convenient monthly amount that you pay to the nonprofit credit counseling agency.
- The agency pays your creditors directly: Each month, a direct payment from your bank account is made to the agency, which will pay your creditors directly. You will continue to receive statements from your creditors. Check them to verify that payments have been received and your balance is declining. As long as you continue to make your consolidated debt payment to the agency each month, you should become debt free in three to five years.
You should be aware that some creditors require you to be on the debt management program for three months (with on-time payments), before they grant you lower interest rates. Once these lower interest rates have been granted, you should see them reflected on your credit card statements.
You can always pay more than the minimum amount required in your debt management program, but never less. If you are going to pay more than the minimum payment on a one-time only basis, please contact InCharage’s Client Services Department, letting them know that this will be one-time only and what amount you will be paying. They can make adjustments on your account and the posting of your payment will not be delayed. If you plan to pay a higher amount regularly, contact Client Services so they can revise your account.
Preparing for Your First Credit Counseling Session
It doesn’t take very long to prepare for a credit counseling session. As far as documents go, you don’t need much. The credit bureaus can supply the agency with your credit and account information.
However, it wouldn’t hurt to have recent bank statements or account numbers on hand. This way you can verify the information being relayed by the credit bureaus is accurate.
If your situation does call for specific documents, then your credit counselor will let you know exactly what you need once you complete your counseling session.
Choose Which Creditors You Would Like to Include in Your DMP
It’s in your best interest to add every account you can, but you don’t have to. Deciding which accounts to add and which accounts to leave out of your debt management plan is another thing your counselor can help you with.
Debts eligible for a DMP include unsecured debt, meaning credit cards, store cards and gas cards. You may even be able to add some medical bills or collections. However, secured debt, like car loans and mortgages, won’t qualify for the debt management plan.
What to Say When Debt Collectors Call
You may receive collection calls. In some cases, it may take up to three consecutive on-time payments through the debt management plan before it stops calls from debt collectors completely. Should a creditor call, please inform them that you are working with InCharge Debt Solutions. If they call again, notify your counselor at 877-486-4916, and he or she will contact the creditor. It’s important not to ignore any mailings or calls from your creditors. Keep the nonprofit credit agency informed of any contact you have from your creditors or their collection agencies as soon as possible.
Why Are Certified Credit Counselors Important?
When you’re struggling with financial burdens, the last thing you need is bad counseling from either poorly trained or sales-oriented advisors. InCharge is a leading nonprofit organization that employs only certified credit counselors who are well-trained, monitored and audited. They are all experienced in working one-on-one with people like you to apply proven techniques and solutions to improve your financial situation.
Our credit counselors are certified through national organizations including the National Foundation for Credit Counseling (NFCC), the Institute for Financial Literacy (IFL), and the Association for Financial Counseling, Planning and Education (AFCPE).
Housing Counselors are certified through national organizations such as the National Council of La Raza (NCLR), NeighborWorks America and the NFCC. As part of these certifications, counselors pass a series of exams and continue with ongoing education to maintain their certified status.
Is Counseling Confidential?
Anything discussed or gathered in a nonprofit credit counseling session is confidential. All your records are kept in a secure location. Your financial information will not be shared with anyone unless we have your written permission.
Will InCharge Report Financial Information to the IRS or Credit Reporting Agencies?
InCharge does not report your financial information to the IRS or any of the credit reporting agencies.
What Happens Once You Have Enrolled in the InCharge DMP?
Debt management plans are long-term commitments that last between three to five years. During this time period, you will make a payment once a month to InCharge, which in turn, will make sure that money gets deposited to all your creditors.
Keep in mind: if you open any new credit cards before the end of the program, you risk being kicked out. Creditors require that participants in a DMP close all credit card accounts. This is another thing your counselor can go over with you in more detail.
After enrolling in a debt management plan, you may receive lowered interest rates and possibly dropped late fees. Some creditors may hold out on these benefits until you’ve made at least three consecutive payments. However, once established, these benefits will last through the end of the DMP, so long as you continue making timely payments.