Frequently Asked Questions

Credit Counseling FAQ

I have many bills and I want to consolidate them into one payment. Can you help me?
Yes, we can help you.  A certified counselor can look at your bills and together you can create a spending plan that will help you repay your bills.  We may suggest that you enroll in our Debt Management Plan.  This will allow us to negotiate on your behalf for account concessions, such as reductions in payments or fees.

We do not “consolidate” or lend out new money.

 

Do you offer settlements on my behalf to my creditors?
We are not an agency that typically will request settlements with your creditors, however, there are times that collection agencies may accept “less than full” pay offs. However, you should find out how a ‘less than full” pay off would be reported to the credit bureaus.

 

My daughter has racked up a number of student loans. Can you work with all of the different agencies?
We have a couple of resources that we could refer her to for Student Loan issues and default prevention
                Wm D. Ford Foundation    800-848-0979
                Student Assist Foundation                800-852-2761 x0643
                MT Guaranteed Student Loan Program 800-537-7508
Any of these agencies should be able to assist her in working out a suitable plan or arrangement.

 

I just went through a divorce and in the divorce decree, my spouse was given the responsibility to pay the credit cards.  He has not done that and now they are calling me.  Can they do that?
Yes.  Unfortunately, the original signed contract overrides the divorce decree.  Therefore, if your spouse skips out on the bills and the decree that the court put in place, you will have to either pay the bill or go back to court.

Additionally if your name is on the contract and your spouse files for bankruptcy and you did not, you could also be liable in this instance as well.  You will want to talk to your attorney if this happens.

 

Does joining a debt management plan hurt your credit?
While CCCS does not report to the credit reporting agencies, your creditors may report to them that they are receiving payments under a debt management plan.  It may have an adverse affect on future credit. 

We recommend that if you are starting the debt management plan, you should pay continue to pay when due to keep your status current.

 

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.

 

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.
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.

 

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.

 

I am a co-signer on a car for my friend, son, daughter, etc.  He/She can no longer make this payment.  What are my responsibilities?  Will I have to make payments?  Will it affect my credit report?
Anytime you co-sign on a debt, you are guaranteeing that if the primary borrower defaults, you will make the required payments.  The lender checked both the primary borrower’s and the co-signer’s credit before making the loan.  Consequently, if the primary borrower defaults and you choose not to fulfill the obligation, your credit will be affected as well.  In the event the merchandise (car, etc.) is repossessed, it will show on both parties’ credit reports.  This may have a negative impact on future borrowing.

 

I have medical bills that were not covered by insurance, I cannot afford to pay them in full and now they have gone to collections.  The collection agency told me they could get a judgment.  What does that mean?
A judgment is a legal decision that enables a creditor to obtain court approval to 1) garnish your wages; 2) execute against your back account; 3) file a lien against any real property such as autos, home, household goods, etc.

If  receive a judgment against you and you have a vehicle that is paid off, the creditor could file a lien against your auto, take possession and sell it to satisfy all or part of the debt.  If you have a creditor that is telling you they are going to take you to court, they probably will and you should seek legal advice.
I have been the victim of fraud and identity theft.  What do I do?
Before you do anything else, file a police report and notify your financial institution.  They will advise you on the next steps.  You will also need to notify the three credit bureaus and place a watch on your accounts. 

The Federal Trade Commission has a lot of information and guidelines for filing reports on their website http://www.ftc.gov/ftc/consumer.htm.

Once you have started the process, it is very important that you follow up every six months by pulling your credit reports to be aware of what shows up on them.

To prevent fraud or id theft, be sure to protect your personal information.  Do not keep pin numbers with your ATM/Debit cards; do not use your SSN on your driver’s license; do not carry your SS card and a copy of your birth certificate in your wallet.  Don’t make it easy for thieves.

 

Does getting married to someone with financial problems hurt your credit?  What if your name is not on the bill?  What if you add your name to the bill later? 
Credit is an individual matter, unless you have joint accounts.  If you marry someone with credit issues, they have the credit issues, unless you add yourself to their accounts.  Then you become liable with the original debtor and it does affect your credit.

 

What kind of income qualifies for DMP enrollment? 
We can’t say that without meeting with the client.  There is not set income requirement for the DMP.  What is needed is money to be able to pay the creditors.  A surplus in the budget is what does it, and you can have any type of income and have a surplus..

 

How do you, as a parent, help your teen build good credit? 
Helping your teen build good credit is a balance between helping them establish credit without amassing a lot of debt.  A good way to do it is to establish a secured credit card, where there are actual dollars backing the credit granted.  Also, cosigning with them on a loan is a way to help them establish credit.

 

Where do landlords go to set up an account to pull credit reports? 
They would need to have a bureau or organization pull the report.  Usually they pay for this service.  For example, we have a contract with Peregrin Services to pull the credit reports for our clients.

 

Why do you charge if you are a nonprofit? 
Although we do charge for our services, the fees we charge do not even approach the actual cost incurred for the services we provide.  Our average per unit cost for an hour of counseling is around $180.  We do pass a minimal amount of cost to the client to help offset costs, but it is also to give the client some incentive to follow through with their program because they have paid for it.

 

How can I get to talk to a human at the credit bureau?  
Keep going through the phone options until it gives you a choice to talk to someone.  Once you do, ask for their direct number or extension so you can get back to the same person the next time you need to call in.

 

 

Bankruptcy FAQ

 

I want to file Bankruptcy what do I need to do?
Make an appointment for an in-person or telephone counseling session.  You will need to provide a picture ID, last year’s tax return, proof of income for past 6 months and a recent credit report.  You can obtain a copy of your free credit report at www.annualcreditreport.com

 

What are my requirements with the new bankruptcy laws?
Prior to filing for bankruptcy, you must attend a 90-minute pre-filing counseling session.  Our counselor will help you develop a budget that is right for you.  We will also answer questions you may have regarding finances and long-term money management.

After completing this session, you will receive a certificate of completion which is now required for filing bankruptcy.

After you have filed bankruptcy and prior to discharge, you need to attend a two-hour education course. This course provides you the necessary tools to regain financial stability after bankruptcy.  You will receive a certificate of completion that you are required to show before the court makes a decision to discharge your debt.

 

What is the difference between Chapter 7 and 13?
Chapter 13 or "reorganization" allows debtors with a steady income to pay off all or part of their debt over a 3 to 5 year period instead of surrendering property.
Chapter 7 or "straight bankruptcy" is the most drastic type of bankruptcy. Debtors turn over all of their assets to a court representative for distribution to creditors. Unlike Chapter 13, there is no repayment plan. The court will then declare that legally, the debtors are no longer in debt.

Can a credit counseling agency’s d/b/a appear on the credit counseling certificate?
No. The name of the approved agency must appear on the certificate just as it appears on the US Trustee Program’s Web site.  This will allow the US Trustee to insure that only approved agencies are issuing certificate.

 

Can credit counseling agencies issue blocks of certificates to attorneys or third parties?
No. Agencies may not issue blocks of certificates to attorneys or third parties.  This procedure is highly inappropriate and jeopardizes the integrity of the counseling process.  Such conduct may result in revocation of an agency’s approval to provide counseling in any district.

 

Can payments for a debtor education course be made by a person other than the debtor (e.g., payment by the debtor’s attorney)?
The US Trustee program does not object to payments for a debtor education course that are made by a person(s) other than the debtor, so long as such payments are reasonable and comply with applicable laws, regulations, and ethical requirements.  This position assumes that payments are fully disclosed so to not adversely affect the quality of the services rendered.

 

 

Can a debtor take both mandatory classes before filing bankruptcy?
No. The Bankruptcy code requires (with some exceptions) completion of credit counseling BEFORE an individual files for bankruptcy, and that debtor education take place AFTER the bankruptcy case is filed.  Accordingly, it is not appropriate for an approved agency to offer both services to clients in one pre-bankruptcy session.

 

What determines an individual’s “ability to pay”?
Ability to pay must be determined on a case-by-case basis.  Completing a budget analysis through counseling determines the client’s financial situation and therefore, his/her ability to pay.

 

Do a husband and wife need separate financial counseling sessions if intending to file a joint bankruptcy petition?
Although a husband and wife may attend the same counseling session, each must obtain counseling and be issued separate certificates.

 

Can we advise a client on whether or when to file bankruptcy?
No. The only the consumer or his/her attorney can determine if and when to file bankruptcy.  Advice on the timing and necessity (or lack thereof) of a bankruptcy may constitute legal advice, which could be deemed to be the unauthorized practice of law and the actionable by state authorities.

 

Do individuals with mostly business debt, rather than personal debt need to obtain credit counseling prior to filing a chapter 7 or chapter 13 bankruptcy?
Yes. Individuals who have mostly business debt still must obtain credit counseling prior to filing bankruptcy.

 

What about individuals having mostly business debt, rather than personal debt who intent to file a Chapter 11 bankruptcy. Does the individual have to obtain credit counseling prior to filing bankruptcy?
Yes. Individuals who file Chapter 11-Business Reorganization must obtain credit counseling from an approved agency.

 

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