Frequently Asked Question about Debt Consolidation

We would like to be the first to congratulate you on your first steps toward financial freedom! This guide will help answer some of your questions while starting the initial process of the debt consolidation program.

Q: Who are we?
A: We work with a licensed and bonded 501 ( c ) ( 3 ) non-profit consumer credit counseling agency. Our goal is to help individuals and their families get out of debt and educate them towards sound credit use and budgeting for their future.

Q: Where do I go from here?
A: Congratulate yourself on taking the most difficult step toward getting out of debt by contacting our office. The Debt Consolidation Program (DCP) established for you by your ADC counselor provides a link between you and your creditors. Our representatives are available to help you with any problems or questions you or your creditors may have while in your DCP. This guide will help answer some of your questions while starting the initial process of the Debt Consolidation Program.

Q: How does the DCP work, is this a loan?
A: This is not a loan however; we consolidate your bills into one monthly payment as well as lowering your interest rates. We simply re-structure your debt based on guidelines provided to us by your creditors.

Q: Are there any fees or hidden charges?
A: The fee you incur upon enrollment is a one-time processing fee as well as a $39 monthly administrative fee. This can be tax deductible and is included in your monthly invoice. Once you have completed the voice recorded verification or have completed the online enrollment, your paperwork has been processed and your processing fee is Non-Refundable.

Q: Will ACS contact my creditors in the Debt Consolidation Program?
A: ACS sends a proposal to each of your creditors after you pay your one time processing fee and you have submitted all of the documents requested by your credit counselor. This letter advises each creditor that you have sought debt repayment assistance through ACS and request the creditors support. The proposal letter will identify the following for each creditor:

• Your account number Your total amount of debt
• Your total income Your living expenses
• The names of creditors you enrolled
• Your proposed repayment amount
• The date the creditor may expect payment
• The reason for your plan

Q: Why are my creditors willing to do this?
A: Your creditors do not wish to sell your accounts to collection agencies and no longer retain you as a customer. Our DCP gives you an opportunity to pay off your debt to your creditors in a timely manner with manageable payments.

Q: What if a creditor will not accept the plan?
A: In the event that one of your creditors is unwilling to accept the proposed payment amount. We will contact you to see if you can adjust your budget to meet their requirements.

Q: Can I use the Credit cards I enrolled into the program?
A: No. While you are in the program, these accounts may be closed or frozen. Incurring more charges onto your account will only cause your balances to go up, payments to increase, and prevent you from receiving benefits from your creditors such as: reducing or eliminating the interest on your accounts and lower monthly payments.

Q: When is my monthly payment due?
A: Auto-debit is the easiest system for timely deposits to ACS. You will work with your counselor to pick the due date of your choice. Your funds will be disbursed approximately one week after your account has been debited. Funds pulled on the 25th are sent to your creditors during the first week of the following month.

Q: Can I change my scheduled payment date?
A: Yes, but please give us at least a five business day advanced notice of the original payment date

Q: When one creditor is paid off, what happens to the money that is being paid on that account?
A: The money can be applied either to your remaining accounts or you can reduce your monthly payment by that same amount. In order to become debt free as quickly as possible we encourage you to keep your monthly payment the same and apply it to another creditor. Our trained, professional account managers will determine which account the extra money needs to be applied, unless notice is given by you.

Q: Can I increase my monthly payments to ACS?
A: Definitely! Remember, your objective is to get out of debt as soon as possible. Any time you have the good fortune of having extra money for ACS to send to your creditors, you should do so. Extra funds will be distributed equitably to your creditors. This should reduce the amount of time estimated for the completion of your DCP.

Q: What happens if I receive a large sum of money and want to pay off my account early?
A: When circumstances allow for an early payoff, contact your creditors for an estimate of the final payment amount. Then contact ACS to update balances to ensure funds are disbursed properly. Please make these final payments through ACS. We have a program to help DCP graduates re-establish their credit. If your payoff is larger than your regular deposit amount, we require that you contact us to make arrangements for your final payoff deposit. Contact ACS for instructions on stopping your Auto-deposit if you are paying off your accounts in full.

Q: What if I lose my job?
A: If circumstances make it necessary to miss two consecutive deposits, it may be necessary to close your DCP. Please contact us so that we can discuss the possibility of a review appointment to assist you until you have income again.

Q: Will my creditors still contact me?
A: Once creditors begin to receive regular payments through ACS, they should stop calling you. If they continue to call after you are enrolled in the DCP, do not refuse to talk to them. Instead, let them know that you are enrolled in our DCP and encourage them to contact our Customer Services Department. If they are unable to call, get the name of the creditor and let us know, we will be more than happy to give them a call for you.
Some creditor representatives may tell you that they do not accept ACS payments or that they have never heard of us. Do not be intimidated. We can verify whether a creditor does or does not accept our plan. The majority of creditors elect to work with us. Call Client Services for confirmation. Some creditors will accept payments from us, but will not confirm an accepted proposal.
You may continue to receive routine collection letters from your creditors during your first three months on a DCP. 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 Client Services so we can help you verify that your payments are posted correctly.

Q: Will I receive a monthly Activity statement of my accounts?
A: Yes, you will receive a monthly statement that will reflect your scheduled payments. It will show a breakdown of payments to each creditor and your balances. However, please refer to the statements you receive from your creditors for exact balances and interest rates. We do not get to see your monthly statements from your creditors, so it is up to you to keep track of this. The information you receive from ACS will be estimates only.

Q: Will I still receive statements form my creditors?
A: Yes. Unless a creditor has written off your account. Your creditors will continue sending you monthly statements and will show the payments, which are disbursed from our agency. It is important to keep these statements for your own personal records.

Q: Will my creditors stop finance charges on my account now that I enrolled in a DCP?
A: Many creditors agree to stop or reduce finance charges. However, it is important for you to remember that not all creditors stop interest charges. 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 ACS due date does not coincide with your creditors' due dates you will need to contact creditors and request a change in due date. Some creditors will do so only at the request of the client.

Q: What do I do if my statements reflect late charges or the same interest rate?
A: It may take between 1 to 3 billing cycles before your creditors stop any of the late charges or lower the interest rates. However, please contact our Customer Service Department regarding any questions you have about your statements, so we are able to follow up on this for you.

Q: Can my creditors take legal action against me while I'm enrolled in the DCP?
A: Most creditors prefer to receive payments through ACS rather than go to court. Many stop legal action or hold judgments in suspension if they are receiving regular payments through ACS. 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. Please remember that ACS does not provide legal advice and that you are responsible for engaging personal legal services if needed.

Q: Can ACS fix my credit report or clean it up?
A: No. If negative comments on your credit report are correct, they can remain in your file for up to seven years from the date of the last activity, except for bankruptcy, which can remain for up to 10 years. Avoid organizations offering "credit repair." Upon completion of the DCP, we suggest that you obtain a copy of your credit report to make sure it is accurate. If you believe there are errors in your credit report, notify the credit bureau in writing. The bureau will follow up your request with the creditor. If the creditor agrees with your assessment, your report will be changed

Q: How Will credit counseling affect my credit report?
A: ACS does not report your participation in the Debt Consolidation Program to credit bureaus. However, each creditor deals with ACS clients in a different way.
If your credit report already reflects any late or missed payments, then a Debt Management Program will likely improve your record by facilitating consistent, on-time monthly payments. Also many creditors "re-age" your account, meaning that even if you were late in the past they will report you as "current" as long as you make all your monthly payments on time through the program. Once you have paid off all your debt, you will have a strong foundation to help you reestablish credit.
However, if you currently have perfect credit, then sending reduced payments to creditors or getting interest concessions through the Debt Management Program could put a blemish on your credit report. Please note that your credit report will only be affected while you are on the program. Unlike bankruptcy which could remain on credit report for up to 10 years.
It is up to the individual creditor to make changes in the "History of Payment" column on your credit report. ACS cannot remove information from your credit report but we can assist you in contacting your creditors for a review of your account.

Q: Will creditors help mere-establish credit?
A: There is an increasing number of creditors who will consider granting credit to ACS graduates who have successfully completed their Debt Management Plans. Upon satisfactory completion of your plan you may request the names of creditors who may be willing to re-establish your credit.

What can I do to ensure success in my DCP?

• Make your deposits on time. Auto-Debit provides the most timely, convenient and dependable way of payment, by directly debiting your monthly payment from your checking or savings account. We no longer will accept money orders, cashier checks or personal checks.
• Stay in touch. Contact us immediately if any accounts are turned over to collections agencies. Also if any creditor notifies you of an account number change or address change. If you don't understand something about your creditors mailings or statements, call us.
• Don't make any payments directly to your creditors unless you have discussed this with your counselor first. Send all deposits and extra payments to us.
• Update personal information. Contact us immediately with any changes in name, address, telephone number, email, bank account ect…
• Don't miss deposits or make late deposits for any reason. If you do, your creditors may resume their normal collections activities and regular interest rates and fees.
• Closely monitor your creditors statements. It is up to you to monitor your monthly statements to ensure creditors have reduced interest rates and or stopped late fees and payments are being credited properly. If your creditors reduced interest rates and fees it may take up to three months before these reductions are noted on your statements. Keep all statements in a folder for future reference.

Q: What If I want to cancel my DCP?
A: Our program is a voluntary plan on your part, our part and your creditors part. If you choose to withdraw, please notify ADC and ACS in writing and we will send you a reply confirming your request. We will notify your creditors of your choice to withdraw from the DCP, you will then be responsible for making new payment arrangements.

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