I’ve sent in my initial paperwork, how long do I pay my creditors directly? Until you make your first consolidated payment.  You can call your Debt Free counselor to help you in this transition.  

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What if I can’t start my first payment when I expected?  You are in control of when you send in your first payment.  Once you send in your first payment it is important to be able to continue making payments on time from that point on.

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What are my monthly costs to have my bills consolidated and managed? There are NO monthly costs.  You will pay for the services  Debt Free provides to develop your Personal Financial Analysis and set up the program.   This is your only fee and you should save this fee many times over!

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How do I know my accounts are being paid or when my interest rates go down?  You will continue to receive statements from your creditors which will reflect your payments and interest rate changes.

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Can I have payments made automatically?  Absolutely.  You can set up an electronic draft on either your checking or savings account, insuring that your payments are made on time.

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If I want to increase my payment, can I do that?   Yes, increasing your payment will help you get out of debt faster and will likely save you additional interest. We recommend making the established consolidated payment for six months before increasing your monthly payments.  Start a savings plan first!  

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Can I still use my credit cards?  No.  You cannot get out of debt if you continue to use your cards and your creditors will only offer lower interest rates if you agree not to use them.  You can keep an account out of debt management and continue to use it if you need to.  You should discuss this with your Debt Free counselor.

What if I need a credit card for business?  If you need to keep a credit card out of the consolidation program, especially for business purposes, that is fine.  Be sure to discuss this with your counselor to make the best decision about which card to keep out.  But, be careful, you cannot keep one account out and put one in for the same company.  Also, if you do keep a card out, the goal should be to keep it at a zero balance and pay the bill in full every month.  If you find you are increasing your debt, you should stop using it!  

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What if I need a credit card for emergencies?  Be very cautious when you evaluate whether you “need” a credit card or not.  In the long term, do you really want to depend on a credit card for emergency purposes?  You may need to do this at the moment, but the goal is to create a cash emergency fund that will keep you secure in uncertain times, so start saving.  If you depend on credit cards for emergencies, you could end up back into or deeper into debt very quickly.  

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Is using debit cards a good alternative to credit cards?  Yes, debit cards are an excellent alternative to credit cards.  Most banks now can put a Visa or MasterCard logo on your ATM card which is attached to your checking or savings account.  You can use it to rent a car, reserve a hotel room or for purchases just like a credit card, you just have to have the money in the bank before you spend it.  

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If I am getting collection calls what should I do?  Tell them that you are entering into a debt management program.  Send them a payment if you can.  After you’ve made your first payment, refer them to the debt consolidation agency.  Your creditors are notified that you have entered the program with your first payment.  

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What will happen to my interest rates while in the debt consolidation program? The debt consolidation program will reduce or completely eliminate the interest you are paying your creditors through the special agreements made with those creditors in our program. These have already been agreed upon by your creditors. Your creditors will not make the same deal with you as an individual card holder.

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What happens to my credit when I participate in debt consolidation?  This depends on the individual policies of your creditors.  It is likely that your creditors will place  a neutral comment on your credit report stating that you are participating in the program.  This generally will only prevent you from opening additional credit cards and lines of credit while you are paying off the ones you now have.  That’s common sense!  It is usually removed when you have paid off your accounts. There are a few rare creditors that don’t work well with the program and we assist you in screening them and keeping them out of the program.

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What if we need to buy a car or finance a mortgage while we are in debt consolidation?  That is generally not a problem as long as you qualify with income and debt levels and credit requirements.  This does not mean that an individual could not misinterpret the meaning of the program, but you have to ask then whether you would even want to do business with a person or company that does not support your ability to get out of debt when you are completely paying back your creditors!

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I hurt my credit when I was struggling, is there anything I can do to improve it?  Yes, with regular payments through the debt management program, you can rebuild your credit!  Ask your counselor if there are other strategies you should use, such as a secured card, to build additional positive credit while you are paying off your debt.  There should be plenty of people who will be happy to work with you.

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