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DMP – How It Works

February 8, 2012 By Leave a Comment

 

A DMP, or Debt Management Program, is a great way for people to get debt-free with the help of CESI Debt Solutions. However, this great resource can often seem scary or overwhelming for people already stressed over debt. Hopefully I can help alleviate that stress by answering some common questions about DMP’s.

What’s the benefit of a DMP?

You make one easy, affordable monthly payment to us, and according to your plan, we pay all of the creditors you’ve enrolled. Often, creditors give reduced interest rates and waive certain fees for consumers who pay through a DMP.  By teaming up with a CESI counselor, you have a strong teammate in your interaction with creditors.

Why enroll in a DMP through CESI?

As a debt management company, we have strong relationships with financial institutions around the U.S., and we’ll negotiate with your creditors to get you the best benefits possible. We’ve helped thousands of consumers around the U.S. and have an A+ rating with the BBB. Some credit counseling agencies charge high fees and will automatically enroll you in a DMP without reviewing your situation. With CESI, you’ll work with a certified financial counselor to assess your financial situation and discuss whether DMP or other services are the best option for you. CESI is nonprofit- we are here to help.

For more information

If you’re still uneasy about looking into a DMP or other service, check out the Federal Trade Commission’s ’Facts for Consumers’ on DMP here.  We hope we can help you get debt-free, whether it’s through a DMP, financial education, or other service.

 

 

 

Filed Under: Debt Management Program, Featured

Debt Advice From a Baby!

April 20, 2011 By Leave a Comment

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Eliminate Debt – Legal, Effective Options

March 11, 2011 By Leave a Comment

debt relief pill in white

There are many reasons people fall deeply in debt.  Perhaps your situation was caused by something like this: you begin with a new credit card, telling yourself that it will be used only for emergencies or essential purchases.  You start out well enough, keeping the balance low and paying off the total each month.  After a few months, however, you begin making more frivolous purchases, saying to yourself that you have plenty of time to make enough money to pay it back before you start earning large sums of interest.  Then it happens.  An emergency arises that calls for a large amount of money to take care of.  Now you suddenly find yourself over your head and looking for a way to eliminate debt.

Late fees, interest accumulation, and other charges start to overwhelm your credit card and you begin to find it difficult to make even the minimum payments because of all the other expenditures you are dealing with at the same time.  Now you face daily harassment from collection agencies and you are ready for all of it to stop.  If this situation sounds familiar, you are like millions of Americans looking to eliminate debt legally and effectively so you can get your life back.

Debt Settlement

Many people decide to pursue formal courses of action to eliminate debt by getting in touch with a company that can help them improve their situation.  One popular option for getting out of debt is called debt settlement.  This is an intensive process that involves negotiating with debtors until they settle on a smaller sum than the amount you currently owe.  There are professional agencies that will speak for you and get the deal you deserve.  In some cases, people are able to wipe out up to half of their debt by going through this process, meaning they can escape debt twice as fast. There are risks and consequences with this choice so make sure to do your homework and only deal with a reputable company. If it sounds too good to be true, it just might be.

Debt Management

Another common choice is to choose debt management (sometimes called debt consolidation.)  This method combines all your current debts are combined into one monthly payment while working with your creditors to get lower interest rates.  This may take a little longer than debt settlement, but you are paying back the full balance you owe, typically without your credit taking a big hit in the process. Again, you want to make sure you are dealing with a reputable company and do some research before making a decision.

Both of these options are offered by professional companies that will prevent you from needing to navigate the process on your own.  Once you are free of debt, think of all the things you can do!

Filed Under: Credit, Credit Counseling, Debt, Debt Management Program, Featured Tagged With: , , ,

Paid Back And Proud

February 1, 2011 By Leave a Comment

More than 6,600 consumers nationwide graduated from CESI’s debt management program (DMP)  in 2010. To graduate, the client pays back 100% of their enrolled debt.. This number is a 7% increase from 2009.

Consumers enter our debt management program to regain control of their finances by paying off credit card debt in a timely manner and in many cases avoiding penalties and lowering interest rates. After entering the program, clients usually pay off their credit cards much faster than if they were to do it on their own. The length a client stays on the program depends on their total debt and income.

“I had over $25,000 in credit card debt when I started the program four years ago.  I graduated in November and the freedom I feel is truly indescribable. I would not have been able to do this myself, so I am so thankful to CESI for helping me become debt-free and set me on the  path to stay this way for life,” says Kathy, a Maryland resident and 2010 graduate of the CESI’s DMP.

“Helping consumers become debt-free and better, wiser consumers is the primary goal that we at CESI Debt Solutions work towards every day,” says Dr. Diane Chen, founder and CEO of CESI Debt Solutions.. “Knowing that thousands of consumers have turned to us for financial freedom and then stuck with the program to pay off their credit card debt in full is deeply rewarding.  On behalf of all of our employees, we are very proud of our clients’ accomplishments.”

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Is a Debt Free Life Really Possible?

January 12, 2011 By Leave a Comment

Can you life a life without debt? We think you can and so do the over 6,000 people who graduated “debt free” in 2010 from CESI’s Debt Management Program!

Just ask the more than 6,000 individuals who completed CESI’s Debt Management Program and paid off their unsecured debt! What would your life be like without the stress of debt? Would you have more free time? Would you sleep better? Would you enjoy your family more? What would you do with the extra money you had every month?

Each month we track our program “graduates” and last year they numbered 6,639. Those families are now living without debt. They may still have a car payment or house payment, but they no longer have to worry about how to pay their numerous creditors month after month. They aren’t laying awake at night worrying about how to pay their bills. They are probably enjoying life a lot more these days! It is our sincere hope that eliminating their debt  transforms their lives and that they continue to live without the financial handcuffs of debt keeping them captive.So can you do it? We think you can. Since CESI began in 1998 over 42,000 families have become debt free. You could be one of them!

Find out today how you can begin “life after debt” and join the thousands of people who have learned to live without debt hanging over their heads.

Filed Under: Debt, Debt Management Program, Financial Tips and Tricks

Simple Tips to Keep Debt Under Control

January 11, 2011 By Leave a Comment

We all know that debt can be dangerous to your financial well-being, but how do you avoid it? Here are a few simple tips to keep the debt-monster at bay!

Debt is a scary topic that unfortunately affects many people today.  Whether are you are currently struggling to manage your debt or you want to prevent yourself from falling into a debt trap, you can utilize these tips to help you.  There is always a way to get out of debt instead of digging your hole deeper—all you need is simply to know how.

Monthly Budget

The first suggestion is to create and stick to a monthly income and expenditure chart.  On this chart, which you can create using a spreadsheet program on your computer, you keep track of your monthly income and balance it with all your expenditures.  These include rent, car payments, gas, groceries, and monthly bills—such as utilities, credit card payments, cell phone, and insurance.  Also, do not forget a miscellaneous category for unexpected repairs and replacements.  An entertainment category can be created based on how much you have left over in your budget after all the categories have been satisfied.  Cut down on costs wherever you can and always try to stay under budget.

Control credit cards

Next, treat your credit cards like cash.  Do not spend more than you have available to pay off in full the next month.  This will only cause interest to build up and make a great deal not so great after months of putting off paying for it.  If you have credit cards carrying a balance each month, pay off the highest interest cards as soon as possible to get yourself out of debt faster.  Never simply settle for paying the minimum—this is a trap that will keep you paying interest for years until you finally get the sum repaid in full.

Get help

Then, if you are in a really desperate situation in regards to your debt, you may want to seek the help of a debt management company.  However, you must beware of fraudulent companies.  Because of the rise of debt and the need consumers have to receive help from these kinds of companies, the presence of frauds is growing.  The best way to know you are in touch with a trustworthy company is to ask careful questions. Don’t ever pay fees upfront and make sure they are affiliated with the Better Business Bureau. Ask a friend or.

Spending Less

Your final tip is to simply spend less.  Realistically understand how much you can afford to spend and always have a penny set aside for a rainy day.  If need be, you should be willing to sell some old possessions and downsize your living accommodations to make ends meet and avoid debt.

Filed Under: Debt, Debt Management Program, Financial Tips and Tricks

Tips for Christmas spending when you are on a Debt Managment Plan

December 8, 2010 By Leave a Comment

It’s easy to think that when you enter a Debt Managment Plan that all extra spending has to be cut out. That doesn’t have to be the case! You can still have a great holiday without jeopardizing your DMP benefits.

You don’t necessarily have to skimp on buying Christmas gifts when you are living with a debt management plan; you just have to practice some smart shopping and budgeting. There are plenty of ways to maintain holiday cheer and purchase affordable, yet still memorable, gifts for friends and family. Here are a few tips for holiday spending while upholding your debt management plan.

•Budget! Flesh out a budget concerning your holiday spending and stick to it. Realize what you can afford to spend on gifts and what you can’t, and prioritize accordingly.

•Make a list and check it twice, heck, check it five or six times. After you have drawn up a budget for your holiday spending, make a list of gifts and supplies that you can afford now. This will make sure that you don’t give in to any unnecessary impulse buys that will have you staying up nights worrying about bills come January.

•Compare prices. There are a slew of price comparison sites online that can help you get the best deals on the gifts you want. Make sure you do your research on the gifts in your list to ensure that you get the best bang for your buck.

•We don’t recommend you use your credit card for Christmas spending. But if you do, make sure that you can afford to pay off what you owe before interests starts accumulating, this is why you needed to get on a debt management plan in the first place.

•Stick to the essentials. The essential Christmas goods aren’t too pricey to begin with. You don’t need to empty your wallet to enjoy Christmas.

 

Remember, spending money isn’t what the season is about. Get creative by baking cookies, making your own gifts or by just spending time in with friends and family.

Filed Under: Debt Management Program, Financial Tips and Tricks, Holiday Spending

Thinking About Settlement?—Not So Fast

November 12, 2010 By Leave a Comment

When dealing with a large amount of debt it can be tempting to believe the promises you see everywhere to “settle your debt for pennies on the dollar.” Here is a breakdown of the pluses and minuses of doing a settlement program to pay off your debt

In the course of our counseling sessions, we often get lots of questions about doing a settlement program in order to pay off debts. There are lots of companies out there advertising that they can arrange with your creditors for you to pay back less than what you actually owe. These programs sound like great deals financially, and in some limited situations they can make sense for people. But you need to be sure you ask a lot of questions about how they work, because there can be quite a few side effects from doing a settlement.

Settlement will reflect on credit report

First of all, with a settlement you are not paying your accounts back as you originally agreed and that will be reflected on your credit report. Your credit report is going to take a hit from doing a settlement. And if you try to get credit after doing a settlement program, future creditors are going to be very skeptical about giving you that credit. After all, if you didn’t pay back your original debts in full, why should they think you are going to pay new debts back?

Next, the way the programs typically work is that you pay a monthly payment into a “holding” account until you have the full amount of the settlement to pay to your creditor. In the mean time, nothing is typically going to your creditors, your accounts are going delinquent and your credit is taking a hit because of the delinquency as well. Not to mention you are likely to hear from your creditors trying to collect what you owe.

Affects tax

Also, one little known consequence of settlement programs has to do with the tax ramifications. The IRS is going to consider the difference between what you originally owed your creditors and what you settle for as taxable income to you, so be ready for a tax hit if you do one of these programs.

Settlement may be the best option

Again, in some limited situations, doing a settlement program can make sense. If you simply can’t afford to pay your creditors what you owe them but do want to pay them something, are not concerned about your credit rating, and aren’t concerned about the extra tax hit you may take, a settlement could be a way out for you without having to do a full blown bankruptcy. If you decide to look into settlement companies, do as much research on the companies you are dealing with as possible. Make sure they are reputable by at least seeing if they are listed with the better business bureau. And ask lots of questions. Legitimate companies should be laying out all the potential negatives for you along with the money they are claiming to save you.

And, finally, never be afraid to call your creditors directly if you are getting behind on payments. They are often willing to deal or settle with you directly. In some cases, even if you pay back less than what you owe, you may be able to get your creditors to give you something in writing saying they consider you paid in full, which could be to your benefit. It’s always worth it to call and negotiate directly with your creditors.

It can be overwhelming and confusing to figure out how to handle debt as it piles up on you. That is what our financial counselors are here for. Call us today at 1-866-635-7121 for a free financial assessment and a breakdown of what all the options might be for your particular situation.

Filed Under: Credit Reports and Scores, Debt, Debt Management Program, Financial Education, Financial Tips and Tricks

Signs That You Might Have a Debt Poblem

September 14, 2010 By Leave a Comment

Do your debts keep you up at night, do you wake up with a cold sweat in the morning wondering if they are coming for your car today? Do you say a small prayer, and look away when you pull your checking account up on-line? If you suffer from these symptoms I think I may have found an article for you.

You know, the older I get the less I feel like I know. In my time as a Financial Counselor here I have learned quite a few things about the signs to watch for when you are in the midst of, and when you are on the edge of a financial catastrophe.  The signs are un-mistakable, and the results can sometimes take years to recover from.   It can be very difficult to really know for sure where you stand but there are a few signs that are unmistakable.  This article http://articles.moneycentral.msn.com/SavingandDebt/ManageDebt/warning-signs-of-a-debt-problem.aspx does a good job of giving you a great idea of where you stand.  To summarize: if you suddenly find yourself paying only the minimums, or if you find yourself suddenly in the middle of a credit spending addiction it may be time to look for some help.

Minimum Payment Mistake

The worst part of the minimum payment syndrome is the two results that everyone forgets about.  When you are about to make that credit card purchase, you need to think.; Can I pay this off by the end of the billing cycle?  If the answer is no, then the card should go back in the wallet and you should walk away.  If it  means you will be using more than 20 percent of your available balance, than you are in an unhealthy area when it comes to your debt to income ratio.  The article gives this example:  if your income is 1000 dollars a month, and you have a 200 dollar a month car payment, then you should not  have any more debt. The higher your debt to income ration, the more difficulty you will have with regard to interest rates or your ability to get a loan.

The second problem with paying only the minimum payments is that you will cost yourself much more money paying back the same debt.  By paying the minimums you are only paying a very small amount against the principle, thus costing you  a lot of time, and a lot of extra money over the long haul.

Credit Addiction is Real

The article also approaches an even more troubling problem that has many people coming to us on a daily basis.  Many of people have a very difficult and trying addiction to credit card spending.  There are a few signs that the article points out as red flags when it comes to credit spending.  If you find yourself constantly calling your credit card issuers to check your available credit, if you begin to count on your credit cards as additional income, and if you find yourself using credit for things you used to pay for in cash.  If you get to this point and you realize you have a problem, not even paying off the balances can fix it.  If you finally pay off the balances you may still find yourself recharging on the card.  At some point you have to realize that this is a bad thing, and stop spending.

Getting Help

Now if you do find yourself in these areas there is help.  The most common method is a debt management plan, set up with a financial counselor during a credit consulting session.  What this does is take into account all of your monthly expenses try to help you with a monthly budget to go by, and set up a plan with your creditors.  With a lower interest rate, lower payment and to help you get paid off faster than you would on your own.  The most important thing to remember is not to wait.  The debt did not create itsself and it will not go away on its own.  If you do wait and the hole becomes deeper, than you could end up looking at your last resort options which would be debt settlement, and bankruptcy.  So keep an eye out for the red flags, and get on it before its too late.

Filed Under: Debt, Debt Management Program, Financial Tips and Tricks

Debt Settlement Myths

August 20, 2010 By Leave a Comment

“Get rid of your debt for pennies on the dollar!” Everyone’s heard commercials with variations on this theme, but how often do we really sit down and think about how true it is? Check out some of the most common misconceptions about debt settlement companies, and learn that as the saying goes, if it’s too good to be true, than it probably is.

If I had a nickel for every time I’ve spoken to a client who’s considering debt settlement without being sure of what debt settlement is, I wouldn’t be here. I’d be in my summer house in the Hamptons – the one that I bought with all of those nickels. The truth is that most people aren’t aware of what debt settlement involves. They just think, “Settlement? That means that I can settle  my debts with the creditors quickly and easily, and get them off my back faster than you can say ‘payoff.’” Not necessarily. Here are some of the more common myths about debt settlement (and there were a lot of them to choose from):

1. “Debt settlement is my right.”

No, it isn’t. You have to have a very good reason to even be a candidate for having your balances cut in half (or cut by whatever percentage they agree to), and I hate to break it to you, but something like, “Macy’s was having a one-day sale!” doesn’t count. Reasons that do count are divorce, job loss, or hospital stays – anything that indicates financial hardship, especially the kind outside of the cardholder’s control. Sorry, but Macy’s doesn’t count, no matter how cute those shoes were.

2.  “Debt settlement won’t affect my credit score.”

The way that debt settlement works poses an inherent danger to your score in and of itself. Naturally, what makes creditors happiest is to see timely and consistent payments on balances, on which the minimum payment or (preferrably) more gets paid each month. With settlement, after you sign up, you give them a monthly amount that they send to your creditors. They don’t, however, send this money right away, but rather wait a period of 3-6 months, the reasoning being that creditors are more willing to settle an account when it’s past due than when it’s current. Of course, when this happens, the missed payments will undoubtedly be reported to the credit bureaus, and down goes your score. In addition, while the effect isn’t nearly as bad as bankruptcy, the fact that the balances were paid off in part rather than in full can’t help things either.

3.  “Debt settlement is cheap.”

It may seem that way, at least until you get a look at the fees charged by the debt settlement company, or see that 1099-C from the IRS come tax time (but more on that later). Companies charge fees for their services using one of two ways. They either (1) ask for a percentage of your total debt (usually 15-18%, and usually up-front), or (2) the percentage of what you end up saving (usually around 25%, and usually after you settle). And that doesn’t include the monthly fees, or the initial start-up fee.

As for the 1099-C, keep an eye out for it in your mailbox right around April.  You know that amount on your balances that you didn’t have to pay by going through debt settlement?  The IRS will count that as taxable income. In other words, you can add the amount forgiven by your creditors to your annual taxable income, and it may actually place you in a higher tax bracket.

4.  “Debt settlement has to involve a third party.”

If you have the stomach for it, you can cut out the middleman (i.e., a debt settlement company) and try negotiating with your creditors yourself.  Think of it from the creditors’ point of view – they want to collect as much money as they can.  Involving a debt settlement company will naturally mean that some of the money that would have gone to your creditors is now going to the company instead. To quote Ken Clark, author of “The Complete Idiot’s Guide to Getting out of Debt,” the biggest issue that people have with this, however, is, “”It comes back to hand-holding. There’s a huge fear of conflict. It’s like the kid who broke the window and doesn’t want to go in and face Mom and Dad. We’re afraid to face these companies.” The way I see it, mom and dad are going to find out eventually, so just  fess up and see what can be done to fix things.

Filed Under: Debt, Debt Management Program
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