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Why
do I need credit counseling or credit counselors?
In
some cases, you can negotiate with creditors on your own to
arrange payment or have positive information reported to a
credit bureau. However, to get the benefits of lowered monthly
payments, lower interest rates, stopped late charges, and
waived over the limit fees, you need Debt Wave's credit counseling
and counselors. As a non-profit organization, Debt Wave's
credit counseling and counselors can secure you these benefits
not usually available to credit consumers.
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Why
can’t I just keep paying off my creditors on my own?
If
you keep paying just the minimum to your creditors at the
current interest rate, it will take you much longer than if
you paid off your debt through Debt Wave's credit counseling
and counselors. A $10,000 debt usually takes 32 years and
$24,500 to pay off, if you are paying the monthly minimum
of 2.5% of the balance at an average interest rate of 18.5%.
Because we may be able to reduce your interest rates, stop
over the limit fees, and so on, it will take a lot less time
to pay off your debt through us. Chances are, in the past,
all your debt payments have just gone to pay off interest.
You probably haven’t even touched the balance! On average,
Debt Wave credit counseling clients pay off their debts in
3 to 5 years, depending on individual circumstances.
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How
much will it cost me to be on the Debt Management Program
and have credit counseling and counselors?
The
consultation is FREE to everyone. If
you are comfortable with what we set up for you, we do request
a one-time voluntary contribution. There is also a small monthly
service charge to cover the costs of handling accounts. The
monthly service fee is determined by the number of account
a client has on the Debt Management Program. As a non-for
profit organization, Debt Wave depends on these small contributions
to meet our operating costs.
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How
will joining DWCC’ Debt Management affect my credit rating?
Do
you have a good credit history?
| 1.
How does this affect my credit rating ( if current)? |
| The
banks judge your credit in two ways: Your payment history
and your debt to income ratio. Right now you have a great
payment history, the problem you are running into is that
you are a little over-extended. By coming on our program
we will keep your payment history right where it is, and
by reducing the interest rates the banks are charging
you, more of your money to go towards your balances. This
will bring your debt to income ratio down in line to exactly
what the banks are looking for. |
| 2.
How does this affect my credit (if behind)? |
| Right
now you are considered a slow pay on your credit report.
By coming on our program we will be able to re-age your
accounts back to a current status after only three payments
into our program. This will show the bank that you are
back on track with your finances. |
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Can
I send in more money once I have a better cash flow?
Of
course - you can always increase your monthly payment. The
more you pay, the faster your accounts will be paid off. Just
let Debt Wave credit counseling and counselors know you want
to increase your payments beforehand so we can figure out
which creditors to pay more money.
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Should
I pay my bills in the time before I send you my first payment?
That’s
your decision. We recommend that you do if you can, because
there is a brief negotiation period, after we receive your
first DWCC payment, when we make arrangements for future payments
with your creditors. If you miss due dates for accounts in
the meantime, you are risking penalty fees and negative information
being reported to the credit bureau.
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Will
I still receive harassing phone calls?
You
might the first several months on the program since it takes
time for your creditor’s collections department to find
out you’re with Debt Wave credit counseling and counselors.
If you get a harassing call, inform the party to call DWCC
and speak to your account specialist. If you get a harassing
call from a collections agency that is not part of your creditor’s
company, we will provide you with a cease and desist letter.
3rd party collection agents must obey this letter, according
to the Fair Debt Collection Practices Act. Make sure you tell
your account specialist if you receive any such calls from
a collections agent.
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