Q: What is a debt management program?
A: A debt management program is an arrangement where you make one convenient monthly payment to a debt counseling agency, and the agency distributes individual payments to your creditors.
Q: How does the debt management program work?
A:
- First, we’ll gather some personal information from you.
- Next, we’ll complete a financial assessment, which means we will go over your income and expenses to make sure the program is a fit for you. Basically, we’ll complete a budget.
- If the debt management program is the best option for you, we will gather your creditor information to calculate your new monthly payment.
- Then, you’ll take the first step to becoming debt free by activating your account through e-mail or fax. Keep in mind that nothing actually happens until we receive your authorization.
- Next, instead of making individual payments to your creditors each month, we’ll group them into one monthly payment, which is automatically deducted from your bank account on a date that we will choose together.
- Then, we contact your creditors to negotiate benefits like lower monthly payments and reduced overall interest rates.
- Finally, you’ll pay off your debts much faster than you would on your own by paying according to schedule, usually within 3-5 years.
What do you need to do to be successful on the program?
Number one:
Make your payments, on time, every time. This is the most important thing for you and your creditors. This is a must to continue your enrollment in the DMP.
Number two:
Keep the same payment date — your creditor benefits depend on it. Once we agree that this program is right for you, we’ll choose a regular monthly payment date that works for you.
Number three:
Track your progress. Every month, you’ll get a statement from us showing what we sent to your creditors. You’ll also continue to receive statements from your creditors showing what they received and how it was applied to your account. Comparing the two statements allows you to make sure that everything balances out.
Q: How much does the debt management program cost?
A: Normally, there is a one-time activation fee and a monthly service fee. These fees are included in your monthly payments, so you do not need to have money today to start your journey towards financial freedom.
Please note that your state laws regulate debt management fees.
Call us at 1-866-484-5373 for the fees that apply to your state.
Q: Is a debt management program right for me?
A: Typically, people who benefit from a debt management program are those who are getting collection calls, have fallen behind on their payments or have experienced a recent change in their financial situation. In some cases, they might be seeking an alternative to bankruptcy. People choose our program because we don’t keep your first payment like many companies do. We also continually look for ways to save you money through new products and services. Through our arrangements with creditors, we consolidate your payments on unsecured debts like credit cards, department store cards, signature loans, medical bills and collection accounts. Our debt management program does not include secured debts such as home loans or car loans.
Q: Is this a loan?
A: No. At CESI, we discourage our customers from obtaining a debt consolidation loan. We encourage clients to change spending habits, stop using credit cards and get out of debt, not further into debt.
Q: Shouldn’t I try to get a loan?
A: Why borrow more money at high interest? That may already be part of the problem. Remember, our program helps you get lower payments and interest. And that’s the best way to get out of debt.
Q: What is your interest rate?
A: CESI is not a loan company, so we do not charge interest. We work with your creditors to lower your existing interest rates and payments.
Q: What type of debt can I include?
A: Unsecured debt such as credit cards and collection accounts including personal loans, medical bills, department store cards, old disconnected telephone and utility bills, gas cards and repossession loans can be included. Secured or collateralized debt such as your home, cars, boats or motorcycles cannot be included.
Q: What is unsecured debt?
A: Unsecured debt is debt for which a creditor holds no collateral, such as credit cards.
Q: Can I consolidate business credit cards?
A: No. Although some credit issuers will allow this, business credit cards are treated as secured debt by most creditors. Most creditors rely on your business financial statements in order to grant credit. Therefore, they do not allow you to include business debt in consolidation.
Q: Will going through credit counseling or the debt management program affect my credit?
A: The purpose of our debt management program is to help you pay your outstanding debts. We do not report to the credit bureaus, however, your creditors may report to the credit bureaus that you are on a debt management plan by placing DMP or CC (credit counseling) next to the account information. This may affect your ability to accumulate new unsecured debt while on the program.
Q: What effect will this have on my credit when buying a house or car?
A: The fact that you are in a debt management program may or may not affect your ability to be approved for a secured loan while you are enrolled on the program; it depends on the lenders. If you are considering applying for a home or auto loan, we suggest that you contact your bank or potential lender for the specific guidelines to qualifying for a loan.
Q: Can I still use my credit cards?
A: No. Creditors don’t want your debt to increase while you are in a debt repayment program. Therefore, your accounts will be closed or inactivated. However, if you feel you may need a card for emergency purposes, we suggest you try a prepaid card as an alternative. After you have completed a debt management program, many creditors may allow you to reopen your accounts.
Q: Will a counselor also help me with my overall monthly budget?
A: Yes. A counselor can help you to examine your monthly expenses and formulate a monthly budget. If you qualify for a debt management plan, all of your unsecured debts can be paid from automatic deductions from your checking or savings accounts on the day that you choose. By consolidating your payment dates to one day of the month, you will be able to plan a more efficient and effective monthly budget.
Q: Do I have to own a home to enroll?
A: No. All you need to enroll in a debt management program is at least $2,500 in unsecured debt, a source of income and two accounts.
Q: Will I continue to get collection letters and telephone calls from my creditors?
A: Collection calls may continue until the creditor has received the third consecutive payment through the program. Also, the collection agent may not be aware of a proposal from our program until the benefits are granted. Therefore, if you are receiving collection calls, or letters from creditors after you have enrolled on the debt management program, please advise them to call our Creditor Services department at 1-800-778-4851(8:00a.m-10:00p.m., Monday-Friday, Eastern Standard Time).
Q: How do I enroll?
A: To enroll in a CESI debt management program, call us toll-free at 1-800-833-2293. Our representatives are available: Monday-Friday, 8:00a.m. – 9:00p.m. (Eastern Standard Time) and Saturday, 9:00a.m. – 5:00p.m.
Q: How do you stay in business?
A: We are a non-profit organization. Our program receives voluntary support from financial institutions across the country. Why? Because our services work.
Q: Can I pay off my accounts sooner than the end date of my debt management program?
A: Yes, you can. If you decide to pay off any accounts, please call our Client Care Center. They will contact your creditor and advise you of your balances.
Q: Is CESI a legitimate company?
A: Yes, CESI is a non-profit agency, and we are listed with the Raleigh, NC Better Business Bureau. They can be reached at 800-951-3569.
Q: What is a settlement?
A: A settlement is an offer to take partial payment on a balance to close an account. The payments are usually requested in one lump sum. A settlement may reflect negatively on your credit report, and the unpaid balance may be reported as taxable income or sold to a collection agency. CESI does not recommend debt settlement unless there are no other suitable options.
Q: How will my creditors know I have joined a debt management program?
A: Upon receiving your signed client agreement and advanced pay debit form, we will notify your listed creditors that you joined our debt management program upon your first payment. This notification, called a “proposal,” includes the account number and open balance you provided at the time of set-up as well as the CESI payment amount indicated on your repayment schedule.
Q: When should I expect to see benefits on my creditor statements?
A: Creditor benefits are based on consistent and sufficient payments throughout the duration of the program. However, after receipt of three consecutive, monthly payments on your debt management plan, your creditors begin to recognize your commitment to the program and offer benefits, which may include: acceptance of the proposed payment amount, a reduced interest rate, elimination of late fees and/or over-the-limit fees, and current status granted to a past-due account.
Q: Can I change my debit draft payment date?
A: Yes, you can. However, your creditors expect to receive a payment every 30 days. Changing your debit date can negatively affect your payment cycle and any benefits granted by creditors. You should contact us immediately when you realize that you may have difficulties in making a program payment on time.
Q: Will I receive a monthly statement?
A: Since we do not receive copies of your creditor statements, you should confirm that each of your creditors continues to provide monthly statements. CESI will also provide a monthly statement, showing the disbursement of payments to your creditors. Each month, you should compare both statements to ensure that your payments have posted accurately and report any discrepancies.
Q: What should I do if I am able to increase my monthly payment or pay off a creditor balance?
A: That’s great! You’re encouraged to increase your payments whenever possible. You can choose to increase a payment one time, or permanently. If you would like to pay off an account, just contact our Client Services Department at 1-888-419-2374 with the payment amount, and we will adjust your next payment to include the one-time payoff amount.
Q: What happens if I didn’t include all of my credit cards in the debt management program with CESI?
A: Some creditors will require that you include all of your cards on the program, and those accounts will be closed or deactivated. By not including all of your cards or opening any new accounts, you could risk losing your benefits from creditors.
Q: How can I reach you once I’m enrolled in the debt management program?
A: You can access and make changes to your account by returning to this website, by calling our Client Service Department at 888-419-2374 or by accessing your account online at www.CESIDebtSolutions.org.
Client Service Representatives are available to assist you Monday – Friday, 9:00a.m. – 9:00p.m. and Saturday 9:00a.m. – 9:00p.m. (Eastern Standard Time).
Q: How do I choose the right credit counseling agency?
A: When considering a credit counseling agency, you should be aware of what to look for, what to watch out for and what questions to ask when gathering information.
Q: What can I expect when I talk to a credit counselor?
A: We can answer that question on this page: What to expect on the first call .
Q: How do I succeed on a debt management program?
A: By staying committed to making your monthly payments, avoiding using credit cards or opening new card accounts and changing your lifestyle so you can stay debt free after you graduate from the program. The good news is CESI is here to help you each step of the way. Together, we’ll make sure you succeed.
Q: When is my payment due?
A: When you enroll in a debt management program, you can pick the payment date that’s best for you. You may choose any day from the 1st to the 28th of every month. You must choose a payment date within 30 days of enrollment for your first payment date.
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