Debt Management Plan FAQ's

We can't give an accurate estimation without sitting down and meeting with each client individually. There is not a set income requirement for the Debt Management Plan. What is needed is money to be able to pay the creditors. A surplus in the budget is what is essential, and you can have any type of income and have a surplus.

Will CCCS contact my creditors in the Debt Management Plan?

CCCS sends a proposal letter to each of your creditors when you enter the plan and after you have submitted all of the documents requested by your counselor and made your first payment to CCCS. This letter advises each creditor that you have sought debt repayment assistance through CCCS and requests the creditor's support. The proposal letter will identify the following for each creditor:

-Your account number

-Your total debt owed

-Your net income

-Your living expenses

-The names of creditors in your plan

-The amount owed to each creditor in your plan

-Your proposed repayment amount for each creditor

-The date the creditor may expect a payment

-The reason for your plan

Will all of my creditors participate in this plan?

We will negotiate with your non-secured creditors. That would be credit cards, medical, and any collection accounts you may have. You and your counselor will discuss which accounts qualify for inclusion in a debt management plan.

Why must all of my creditors be included in my Debt Management Plan (DMP)?

Creditors work with CCCS because they know they will be treated fairly and equitably. In most cases, all unsecured debts that you owe must be included in the Debt Management Plan.

What if a creditor does not accept the plan?

In the event that one of your creditors is unwilling to accept the proposed payment, our DMP Services Department will contact you to see if you can adjust your budget to meet the creditor's requirements.

Will all creditors accept what you offer them?

This is a voluntary program for both you and your creditor. Creditors have guidelines in place regarding repayment. CCCS will try to work within these guidelines to develop a plan that will be beneficial for all. Your counselor will be able to discuss that with you during your meeting.

Will my creditors still contact me?

Once creditors begin to receive regular payments through CCCS, they should stop calling you. If they continue to call after you are enrolled in the Debt Management Plan (DMP), do not refuse to talk to them. Instead, encourage them to contact us at 1-877-275-2227, option 3.

Some creditor representatives may tell you that they do not accept CCCS payments or that they have never heard of us. Don't be intimidated. We can verify whether a creditor does or does not accept our plan. The majority of creditors elect to work with us; some will accept payments from us, but will not confirm an accepted proposal. Call us for confirmation. You may continue to receive routine collection letters from your creditors during your first three months on a DMP. The majority of these letters are computer generated and are no cause for alarm. However, if you receive correspondence concerning legal action or regarding the transfer of your account from one creditor to another, please contact us so we can help you verify that your payments are posted correctly.

Will my creditors stop finance charges on my accounts now that I am working with CCCS?

Many creditors agree to stop or reduce finance charges but not all. Also, creditors that agree to stop or reduce finance charges or late fees are likely to resume the charges if payments are missed. If your CCCS due date does not coincide with your creditors due dates you need to contact the creditors and request a change in due date. Some creditors will do so only at the request of the client.

Can my creditors take legal action against me while I'm enrolled in the Debt Management Plan (DMP)?

Most creditors prefer to receive payments through CCCS rather than go to court. Many stop legal action or hold judgments in suspension if they are receiving regular payments through CCCS. However, some creditors may elect to take legal action. If you receive a summons to court, follow all instructions of the court or your attorney. Contact CCCS immediately so we can assist you in determining if you need a follow-up appointment with your counselor. You may wish to provide the judge or mediator with a copy of your CCCS paperwork as evidence of your good faith effort to repay your debt. Please remember that CCCS does not provide legal advice and that you are responsible for engaging personal legal services if needed.

How long will my Debt Management Plan (DMP) take to complete?

Clients enrolling in a DMP receive an estimate of the length of time it will take to complete it. This written estimate, or pay-out forecast, identifies all debts that are included in your plan, the total estimated debt owed to each of your creditors, the proposed payment to each creditor, and the anticipated numbers of months necessary to eliminate the debt, assuming all payments are made on time and in full. As your plan progresses you may request an updated version of this forecast by contacting us at 1-877-275-2227.

What can I do to ensure success in my Debt Management Plan (DMP)?

Make your deposits on time. Auto-Deposit provides the most timely, convenient and dependable method of payment by deducting your monthly deposit directly from your checking or savings account. You may send cashier's checks or money orders. No personal checks or cash are accepted.
Closely monitor your creditors' statements. It is up to you to monitor your monthly statements to ensure creditors have reduced interest rates or stopped late fees, if applicable, and CCCS payments are being properly credited. If your specific creditors reduce interest and fees, it can take up to three months before these reductions are noted on your statements. CCCS does not see your monthly statements from creditors so we do not know what they say. Keep all statements in a folder or binder in case you need them for future reference. Also, keep us informed if any accounts are turned over to collection agencies or if any creditor notifies you of an account number or address change.
Stay in touch. Contact us immediately if any problems arise. If you don't understand something about your creditors' statements or mailings, don't panic. Call or email us. We've been dealing successfully with concerned creditors and clients since 1968.
Don't make any payments directly to your creditors unless you have discussed this with us. Send all payments, including any late or extra payments you might be able to make, directly to CCCS.
Don't apply for additional credit without first talking with your counselor. If you do, you will place your DMP in jeopardy.
Update personal information. Contact us immediately with any change in your name, address, telephone number or email address.
Don't miss payments or make late payments to CCCS for any reason. If you do, your creditors may resume their regular collection activities or reinstate regular interest rates and fees.

What if I need to speak with my counselor?

While counselors are always prepared to answer your questions, they have scheduled appointments throughout the business day. Our representatives are trained to answer most questions regarding your debt management plan. In the event our representatives cannot help you, they will contact a DMP Specialist for assistance. If you are in need of additional counseling, an appointment will be scheduled with your counselor.

When I sign the Debt Management Plan agreement, what am I signing?

This agreement is not a contract. The debt management plan is voluntary and may be terminated by you at any time. Additionally, the agreement details what we expect of you, including the promise not to use additional credit and to monitor your plan to determine if it is working for you. Please read it carefully before continuing with your debt management plan.

When a debt management plan is set up who must sign their names?

Anyone who is a party to the debt management plan. If it is you alone then your signature alone will suffice. If any of the debts in the plan include anyone else we need to have their signature as well.

What do I do with my budget?

Use it! The budget that you have developed with your counselor is your road map to a more stable financial future. You will see from the information printout you received at the end of your appointment, that the budget sets aside money for things that may occur at some unknown date in the future - auto repairs for example. So, when you call your counselor and say you can't make this month's payment because of an auto repair or because your quarterly auto insurance payment is due, your counselor may ask you what happened to the money you were going to save for a "rainy day". Remember, CCCS offers evening and weekend budget classes which are free of charge to you. All you must do is call and register.

What will happen to my credit if I go through CCCS?

According to the Consumer Law Center, "Although some creditors do disclose to credit reporting agencies whether a customer is participating in a debt management plan, this won't necessarily have a negative effect on your ability to get credit in the future. Fair, Isaac and Company, the developer of credit-scoring software used by all major credit reporting agencies, says that it does not negatively score a consumer's participation in a debt consolidation plan. On the other hand, individual creditors that pull your entire credit report may consider your participation as a negative factor if you apply for credit after you enter the plan. Moreover, if you are considering credit counseling because you have already fallen behind in paying your debts, your credit score has likely already been negatively affected."

In short, because the status of your credit report is the domain of individual creditors, we can't say and cannot be held responsible. What we can offer about the matter we can say only from our experience. This is no guarantee. The fate of your credit report is also a function of where it is now. In other words, it could improve, it could get worse or it might remain the same....As you consider this question you may want to take into account what might have happened to your credit report had you not embarked on a debt management plan. If the answer is that you would be better off without CCCS then it would be wise to reconsider your participation in the debt management plan. To know more about what to do if negative marks appear on your credit report during the debt management plan, see the question: "What should I do about negative marks on my credit report that were posted after I entered the plan?"

Can I leave the debt management plan if I want to? How do I do it and what will happen with my accounts?

Absolutely - but, we hope you don't. When you sign on to a debt management plan you are giving us permission to interact with your creditors on your behalf. This statement, called the Debt Management Plan Agreement, also outlines what we expect of you during the life of the plan. What you are signing is not a contract. You may leave the program at any time by simply notifying us. This is also a good time to remind you to notify us of this when it happens. Occasionally, individuals will leave our service by simply severing contact. When this happens, it confuses all involved and forces us to close your account as a failed plan (since we don't know otherwise). Within 30 days of the closing of your plan, your creditors will be notified of your status and asked to contact you directly. What happens then? We hope you will take the initiative in contacting your creditors. Your creditors will then change your status to a normal account (at which point any concessions may be withdrawn for the normal fees and interest rates) or the creditor will consider the account in default and may proceed with further collection activities. Your immediate contact with the creditors is important since it may help to determine what will happen with your accounts.

Do I have to put all my debts into a DMP?

Typically, yes. However, there are some exceptions. During the course of a debt management plan it is important that you cease using credit. Accounts are usually closed upon the creditor's receipt of a proposal. Therefore, we do not want to leave any accounts with you that can be used for additional credit. Are there exceptions to this? Yes. If your job requires travel you may keep a credit card for the purpose of business-related travel. You are permitted to keep that account on the understanding that the balance will be paid in full each month. Other accounts typically removed from a debt management plan include payments for secured loans (cars, mortgages...etc.) since, as a rule, the payment amount is not negotiable. Taxes are also removed simply because CCCS usually cannot accomplish more than the client can by dealing directly with the taxing body. And, last but not least, payments on debts owed to friends and family members are also left out of the plan.

Under what circumstances will you discontinue my plan?

We would like to say that your plan will only be discontinued when you successfully complete the plan to repay all of your debts. However, we know this isn't always possible. So we must discontinue plans when they no longer serve you. This is likely to be the case when the payment history is such that the creditors have already removed you from their plans. Those instances are defined by the National Foundation for Consumer Credit as when the first payment in the plan is not made, two payments in a row are missed, four payments in a 12 month period are missed, when a partial payment history is such that it is equal to or less than 4 of the full payments in a year's time, or because of violations in our agreement with you. CCCS does reserve the right (as do you) to terminate any debt management plan at its sole discretion.

What happens if one of my creditors rejects a proposal?

Typically, creditors do accept proposals. Occasionally they won't. When creditors reject proposals, it is usually because they want larger monthly payments in return for interest or other concessions. In this case your counselor will contact you to see if a larger payment can be made. If it is not possible to increase the payment, the counselor may decide, in cooperation with you, to send the payments anyway to create a "good faith effort" to repay the debt, with the payment increase coming at a future date when you have more income or another debt has been paid off. This means that particular account balance may not go down until the payments are increased.

Other debts may be secured by a vehicle or some other item you own and the creditor simply refuses to accept anything less than full payment on the debt and they would prefer that payment come from you. When that happens, your counselor may decide that it would be better for you to assume that portion of the debt management plan. Some small local creditors don't understand the role that CCCS plays in the debt repayment process. When we get this response, our first goal is to introduce ourselves to the creditor and explain our work.

Occasionally, collection agencies who are collecting for one of your original creditors is afraid that their collection efforts will be reduced to a drawn-out four-year plan; or they are afraid that we will attempt to have the original creditor recall that debt from their offices, thereby denying them an opportunity to collect it themselves. Rejecting our proposal allows them to continue with dunning phone calls. The reasons for rejected proposals can be many. In any case, your counselor will decide on a strategy for dealing with it.

My creditors called and said I am no longer on the plan. Is this true?

If you have missed payments, you may no longer be on their plan. This means that they may be accepting payments but not granting any concessions. If you hear this from a creditor, please notify your counselor immediately. If we terminate your plan (as we must under certain circumstances), you will be notified in writing 15 days before we notify the creditors. This will give you the opportunity to appeal the termination or win reinstatement before contact with the creditors is severed.

I have debt that my partner does not know about; can I be part of your program without his/her knowledge?

If the debt is in both parties' names, both parties will have to sign the agreement. It is very important that all parties are aware of the debt, if it is joint credit, your creditor may report payment participation to the credit bureaus and this would affect both parties. If your creditor also requests that you destroy credit cards, this would mean your partner's cards as well.

My neighbor said they were allowed to keep a credit card. Will I be able to as well?

Each situation is unique and is dependant on your list of creditors. A card issued as part of your employment you would need to keep. We would just ask that you sign a statement that this card is for business/emergencies and that you will not use it for personal purchases.

Will I receive a record of my payments to CCCS?

Each month you will receive a CCCS statement showing your payments, payments we have issued to your creditors and a summary of your accounts. The statement is composed of two sections. If you are mailing your payment to us, enclose the bottom section with your payment.

Keep in mind that the balances shown on your CCCS statement are only estimates and may vary from the balances on your creditor statements. Whey you entered our debt management plan, you submitted to your counselor the balance to each creditor. This established the beginning or original balance of your plan. Since some creditors continue to add finance charges while their customers are paying through CCCS, balances for these creditors may be larger than what is shown on your CCCS statement.

If there are major differences between the balance on your creditor statements and what we display, or if you have any questions concerning your CCCS statement, please contact us at 1-877-275-2227, option 3.

Will I receive statements from my creditors?

Unless a creditor has written off your account, you will usually continue to receive monthly statements. When you receive your monthly statements from CCCS, please compare them to the monthly statements from your creditors. It is essential to monitor your creditor statements monthly to ensure interest and late fee concessions are obtained, balances are within $50 of those reflected on your CCCS statement, and payments are posted correctly.

We suggest you mail a copy of each of these monthly statements every six months to:

CCCS of MT

P.O. Box 2326

Great Falls, MT 59403-2326

or fax to: 406-761-8722

Advise DMP Support Specialists immediately if any of your creditors' and CCCS statements differ by more than $50. CCCS attempts to verify balances only as an account is nearing payoff. The balance on your CCCS statement can then be updated to include any finance charges or late fees added by your creditors.

When is my payment due?

You will work with your counselor to choose your due date. Your funds will be paid to the creditors approximately one week after your account has been debited. However, if you mail your deposit, it must be received in our office by the due date shown on your statement. Note: ACH paymentis the easiest way to ensure timely deposits to CCCS and you don't have to worry about mailing anything.

Can I increase my monthly payment to CCCS?

Of course! Remember, your objective is to get out of debt as soon as possible. Whenever you have the good fortune of having extra money for CCCS to send to your creditors, you should do so. Extra funds will be distributed equitably to your creditors, unless you requested otherwise. This should reduce the amount of time estimated for the completion of your debt management plan.

What happens if I want to pay off my account early?

When circumstances allow for an early payoff, contact your creditors for an estimate of the final payment amount. Then contact us to update balances to ensure funds are paid properly. Please make these final payments through CCCS, not to the creditor directly. Contact us for instructions on stopping your ACH payment if you are paying your accounts in full.

What if my payment is late?

You can eliminate late deposits by enrolling in ACH payment. Late payments will be disbursed to creditors as soon as the funds are available. If you miss a payment, you can expect a call from your creditors wanting to know what happened, as well as additional interest, finance charges or late fees on your creditor statements. A CCCS representative may also contact you to offer support and assistance.

What if I miss a payment?

You must make every effort to keep your agreement to make your full payments on time each month. If you miss two consecutive payments or three payments within a 6-month period, CCCS will consider your file inactive and may drop you from the Debt Management Plan (DMP). We advise all creditors on your plan when you have been dropped from the plan. In addition, creditors may drop you from the DMP and resume charging finance charges or late fees and may report this delinquency to credit reporting agencies. If you are having a problem making a deposit, please call us immediately. By keeping us informed, we are better able to work with your creditors to ensure the success of your DMP.

What if I lose my job while I'm enrolled on a DMP?

If circumstances cause you to miss two consecutive payments, it may be necessary to close your debt management plan. Please contact us so that we can discuss the possibility of a review appointment to assist you until you have income again.

Can the amount I pay in each month change?

Unless you have been told otherwise by your counselor, your debt repayment schedule has been developed to include fixed payments throughout the life of the plan. When smaller balances are paid off, those payments are applied to the remaining debts to accelerate the repayment rate. We call this "power pay". However, it is possible that during the course of your debt management plan you may face financial hardship requiring reassessment of the plan. When this happens, you will consult with your counselor and determine if you may reduce the amount being sent to your creditors or if it is beneficial to continue the plan.

Do you hold money from month to month?

Generally, no. CCCS of Montana will disburse all funds in your account within each disbursement cycle - regardless of the amount. This agency is also committed to disbursing funds as quickly as possible after they are put into the account and within the boundaries of the payment cycle. However, at the request of the client, funds can be placed on hold toward a future disbursement date.

If there are a couple of days between when we pay into the plan and the date checks are sent to the creditors, why can't I bring in my money a day late and still have it go out?

When CCCS receives its payments from clients, its objective is to turn around and pay those creditors as soon as possible. Since not every client pays exactly the amount they are expected to, the counselors spend a couple of days justifying accounts and running lengthy reports. This means that there may be little leeway in getting your payment in before it is too late. Check with your counselor.

Can I bring my payment to you in the form of a check or in cash?

No. Unfortunately, we are unable to accept payments in the forms of cash or personal checks. We cannot be responsible for "bounced" checks and the odds that we will experience a few of these over the tens of thousands of payments we process are quite significant. At the same time we are wary of accepting cash. Cash is much harder to trace if it is lost and the security risks of holding thousands of dollars in cash on the premises are substantial.

What payments will you accept?

This agency will accept payments in the form of money orders, certified checks, cashier's checks, and ACH. ACH stands for Automated Clearing House. It means that once a month, with your permission, we go into your bank account and withdraw the money electronically. Even though the setup and administration of these accounts represent a cost to us, we offer it at no charge to our clients.

How do I sign up for ACH (Automated Clearing House)?

Tell your counselor you are interested. Your counselor will give you the necessary papers to sign up. The requirements (this is the fine print) are as follows:

1. Any client of Consumer Credit Counseling Service of Montana (CCCS) may apply for the service of having their monthly payments made electronically through Automated Clearinghouse (ACH).

2. CCCS will offer this service without charge to the client, except under the circumstances described in this policy.

3. CCCS will conduct these transactions under the regulations and requirements of ACH.

4. Electronic transactions will be initiated by 12:00 noon on the date scheduled. All time-limit requirements such as "business days" or "business hours" will be measured from this time.

5. The client will apply for service in writing and within a time period greater than four (4) business days from the date of first withdrawal.

6. Only written change orders will be accepted for modification or termination of electronic transactions and only if they are received at least 72 business hours in advance of the transaction.

7. If transactions are returned for insufficient funds, rescinded agreements, and/or stop payments at the bank, the client's electronic payment option will be canceled by CCCS. Written explanation of cause must be submitted to case manager in order to resume the electronic payment option.

8. If CCCS determines that a client has excessively used the change order system to customize electronic payments, that client may be terminated from the electronic payment service and may not reapply for the service until twelve (12) months of full and uninterrupted payments have been made.

9. CCCS reserves the right to unilaterally terminate the electronic payment agreement at any time for any reason.

If I make a payment to you and then decide I need the money back for a particular expense, will you send the money back to me?

Maybe. Our goal is to send the money to creditors as soon as possible after receiving it from you. If we still have your money order we can sign it back over to you. If it has been deposited in our bank, we can send you a check with a letter notifying you that a payment has been missed and its consequences. If your money has already been printed in a check to the creditor, CCCS will not put a stop payment on the check in order to reissue the funds to you.

Once a check is printed to the creditor, it belongs to the creditor. How do you negotiate with my creditors?

Once we have your signed permission to proceed and your first payment is in house, we contact your creditors with written or, in some cases, electronic proposals. The proposal, which is sent to each creditor, contains some general information and some specifics about your situation. Among the items you will find in a proposal are your name, address & account number, your monthly net income, monthly living expense, total debt owed, amount paid on that debt, the amount owed to the creditor receiving the proposal, the amount we propose to be paid monthly to that creditor, and how many creditors there are. Once the proposal is sent out, we wait to hear from them whether or not they accept the terms and if there will be any concessions & fee abatements.

What if my payment from CCCS does not arrive on time with the creditor and there are late charges?

CCCS notifies creditors at the time proposals are sent that payments will be issued by this office by the 25th of the month. Typically, payments are sent out between the 17th and the 20th. And, the majority of your interest-charging creditors are paid quickly through electronic funds transfers (EFT). However, the danger that a check you send the creditor will get lost or delayed in the mail is the same for CCCS. Occasionally, the check is held up at the creditor's offices and not posted (we have found out, in isolated cases, for up to three weeks!). Because of this, CCCS takes no responsibility for the timing of the arrival of the check once it has left its offices. If a check has not been cashed at the end of 90 days, the appropriate accounts will be credited and a new check issued.

I am really short of cash this month or I have had some unexpected expenses come up; do you think the creditors will allow me to skip a payment?

When the plan is developed, you make a commitment to your creditors that you will make a payment each month. Sometimes this is your last chance before going to collections or worse. It is in your best interest to continue to make this payment. By missing one payment to CCCS, you are not just missing one payment but multiple payments depending on the number of creditors. Each of these creditors will want to know when you plan to catch up this payment.

In some instances, your creditors may revoke any concessions they made, such as reduced interest and lowered payments, and they may restart collection actions. You MUST DISCUSS any change in your plan with your counselor.

Can I pay directly to creditors some months so I don't have to pay your fee?

It is not just because of our fee that we ask you make all payments through our office. If you pay your creditor directly, you may not get the proper credit or the creditor may think that you are off the debt management program. The creditor may also not give the same concessions with regard to fees and interest that you may receive while paying through our office. You also run the risk of voiding your contract with CCCS. If have additional money you want to pay to one or more creditors during a month, it is VERY IMPORTANT that you notify your counselor. He/she will advise you of the best route to go.

Email this page

Debt Management Plan FAQ's

Contact a Financial Coach Now!

User login