 |
 |
Frequently Asked Questions About Our Debt Management Program
What is the Crossroads Debt Management Program? The Crossroads Debt Management Program is a debt consolidation, or credit counseling, plan. It’s a comprehensive and straightforward way to get out of debt that usually won’t destroy your credit like debt settlement or bankruptcy will. When you enroll in our program, we negotiate with your creditors to lower interest rates and stop charging late and over-limit fees so that you can focus on repaying the actual debt. Our certified credit counselors will work with you to establish a monthly budget and set up a payment plan with your creditors within that budget. Rather than making payments to several different creditors every month, you make one to us and we pay your creditors. With credit counseling you end up paying less (because of lowered interest and less fees) and it’s less of a hassle. Read more about the credit counseling process here. How does your program differ from debt settlement? When you make payments in a debt settlement program, the company holds onto the money rather than paying the creditors. Their goal is to get enough of your money saved up that creditors are willing to take less than the full amount. There are several problems with this: your credit rating plummets during this time because payments aren’t being made, only one creditor is dealt with at a time (so the others get even angrier), and you can even end up getting sued by unhappy creditors. It can easily lead to a financial train wreck, leaving you in worse condition than before you started the process. With the Crossroads Debt Management Plan, we pay your creditors on time, as soon as you pay us. If your payments are on time, your credit rating won’t suffer and may actually improve. All of your creditors get paid every month and therefore won’t end up suing you. Read more about debt settlement here. How does your program differ from filing bankruptcy? When you file for bankruptcy it means you refuse to pay back your creditors which destroys your credit. Filing for bankruptcy makes it far more expensive, if not impossible, to buy a house or car, or get a loan for several years. With credit counseling, you repay your creditors over time so your credit rating does not suffer the same hit. Read more about bankruptcy here. How long will it take to pay off my debts? Debt repayment varies greatly from client to client. However, because we are usually able to reduce high interest rates, clients are often able to pay back their debt in three to five years after their debt management program begins. What about the late fees I'm being charged by my creditors? Most creditors will stop charging late and/or over-limit fees once you enroll in our program. What about the high interest on my cards? As a way to support our program, many of your creditors will reduce or even eliminate their interest rate. Why will my creditors lower my interest rates for you, but not for me? When people enroll with our program, it shows that they are committed to getting out of debt. We have a wonderful track record of helping people pay off their debts, so creditors take people more seriously when they are working with us. Your creditors would much rather work with us than turn the account over to the Collection Department. Should I get a loan instead of using your debt management services? Probably not. Loans are what got you into trouble in the first place. Most unsecured loans have high interest rates, and if you get a home equity loan, you are simply securing your credit cards with your home. That is very dangerous! You choose a monthly due date with your credit counselor that fits best into your monthly budget. You can even split your payment in half and pay twice a month. What if I am past due on my accounts? That is no problem at all. Creditors just want to be paid. Most creditors will bring your accounts current, stop late and over limit fees, stop collection calls and reduce or eliminate interest. My accounts are paid on time but my balances do not go down. Can you still help? YES! High interest rates are the real killer. By getting your creditors to reduce their high interest and fees, more of your monthly payment goes to reducing your debt and you can become debt free years quicker than you would on your own. Can I still use my credit cards? Unfortunately, no. We tell your creditors you have a sincere desire to get out of debt and ask them to help. Since using your credit cards will only make your debt worse, the accounts included in your debt management program are closed until you are debt free. How soon can you contact my creditors? Once your enrollment is completed and your first payment is received, payment proposals will be sent to your creditors. Should I tell creditors about my plans to enroll in your program? Yes, any creditors who contact you should be advised of your plans. Major creditors are usually supportive. Will I continue to get calls and collection letters from my creditors? Most creditors will stop collection activity once they receive the first payment from Family Credit. Will Crossroads affect my credit report? If you make your payments to the program on time, your credit rating will almost never be negatively affected by your involvement in a debt management plan. In fact, it can even have a favorable effect. It really depends on your credit history. It is your creditors, not Family Credit, that report your credit history according to their policies with respect to the plan and your payment history prior to and during your participation in the plan. If you want more detailed information about this, call our certified credit counselors at 800-994-3328. Will you send me a detailed monthly statement? Yes. On the 28th of each month, you will receive a detailed statement which summarizes the payments made to each of your creditors
Absolutely. Our respect for your privacy is one of the reasons so many people choose or refer others to Family Credit Management Services. We never have and never will sell your name or address to any party for any reason. At your request, we will even use unmarked envelopes for mailings to your home. What if I win the lottery and want to drop out of your program? That is no problem. You are only enrolled in our program for as long as you want to be. You may terminate the plan at any time for any reason with no penalties. |
