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If you decide to start a debt management plan, there will likely be a one time set-up charge and a monthly fee for the cost of administering the plan. These fees are determined in part by your state of residence and will be calculated by your counselor during your credit counseling session. If you feel that a fee will be too much of a burden for you to pay, talk to your counselor. If you qualify under the U.S. Department of Health and Human Services poverty guidelines, you may be eligible to a fee waiver.
Yes, all unsecured debts should be included on your debt management plan. This means that all revolving credit accounts will be closed to further use. The purpose of this debt repayment program is to help consumers get out of debt. To do this, it’s important that no additional charges are made while are on the program. However, as with any rule, exceptions can occasionally be made. Discuss any accounts you’d like to keep open with your counselor.
The debt management plan itself is unlikely to be reflected on your credit report. Some creditors may report that an account is being paid through a managed repayment plan, though most will not. This notation should not have any impact on your score.
When beginning a debt management plan, the largest immediate impact on your credit is usually that your credit accounts will be closed, which may cause your score to drop. Available credit is a factor in most credit scoring systems, so closing the majority of your accounts can have an adverse effect, at least in the short-term. In the long-term, repaying your debt in full, with consistent monthly payments, should have a significantly more positive impact.
Keep in mind that a debt management plan does not erase negative marks from your credit report. If you have become delinquent on your accounts or miss payments prior to your repayment plan beginning, that will likely have a negative impact on your credit score. Fortunately, that negative impact will diminish over time as long as you avoid future delinquencies.
Yes, MMI is committed to maintaining your privacy and online confidentiality whether you are filling out an online counseling form or maintaining your account online. Our privacy statement outlines the steps that we’ve taken to ensure that any information or data that you provide is kept confidential and cannot be used improperly.
After submitting an online counseling form, a counselor will contact you to set up an appointment. Our professional, certified counselors will assess your financial situation, assist in creating a spending plan, and discuss options for debt repayment.
After you make your first deposit, our support counselors are available to guide you to your financial goals. As a client, access to detailed information about your repayment program is available anytime by accessing your account online or by calling our customer information line during regular business hours.
To find the right solution to your personal financial challenge, simply complete the online counseling form or call a counselor directly. To assist in expediting the counseling process, have your most recent creditor statements available for easy reference.
Each person’s financial situation is unique and so each counseling session is tailored to meet the specific needs of each consumer. A full credit and budget counseling session typically lasts 45-60 minutes, but don’t hesitate to call and speak to a counselor—even if you have only a few minutes to spare. Counselors are available 24 hours a day, 7 days a week to answer questions.
Over the years we’ve developed strong relationships with many of the nation's major credit corporations. If you’re having trouble repaying a credit card, there’s a very good chance we can help. We also work with most unsecured creditors including doctors, attorneys, finance corporations, and collection agencies, if you have additional debts that require assistance.
How do you know when a little “acceptable” debt becomes a potentially dangerous situation? For some, the crisis is as clear as being faced with a decision between taking on more debt or letting their families go hungry. For most, the clues are subtler. As a general rule, no more than 20 percent of your disposable income should go toward debt payments (not including your mortgage).
If you do not know whom you owe or how much you owe, you should obtain copies of your credit report. All major creditors report, on a regular basis, all of their customers’ account information to these credit reporting agencies. Once you have copies of your credit report, you will be able to determine whom you owe and how much you owe. To obtain your free annual credit reports, visit AnnualCreditReport.com; you can also call 877.322.8228.
Generally, before a creditor can attach any funds in your bank account, the creditor has to sue you and obtain a judgment against you. With a judgment, the creditor can then go to your bank and demand that your bank "freeze" all funds you have in your bank account. Sometimes a creditor will enter a "default judgment" where a default resulted only because a debtor did not appear in court to plead their case. If a creditor takes legal action against you, consult with a qualified attorney immediately.
Each state sets their own laws as to what, and how, a creditor can collect on a delinquent account. Some states permit a creditor to garnish a debtor’s wages, others don't. Some states exempt just about all assets a debtor has from seizure by a creditor to satisfy the payment of a debt. Other states can force you to sell some of your assets to satisfy a judgment.
You can stop a garnishment by negotiating with the creditor or paying the balance in full.
You might also be able to request a hearing to argue that it will be a financial hardship on you if your property is taken. Filing bankruptcy will also stop some wage garnishments. Because these are legal issues, we recommend you discuss your options with an attorney.
In most states, before a creditor can garnish a debtor’s wages, the creditor must get court approval. Please check with the court to determine the outcome of any actions taken related to your debt.
It might also be worth your time to consult with an attorney about your rights. If you cannot afford a private attorney, you can contact your local legal aid office.
If the garnishment is legal, the federal Consumer Credit Protection Act (CCPA) permits a creditor to garnish up to 25 percent of an employee’s net earnings.
The provisions of the CCPA are administered and enforced by the Department of Labor, Employment Standards Administration, Washington, DC. If you would like further clarification of this law and possibly contest this garnishment, you can contact them at 866-4USWAGE or visit the Department of Labor's website and information about wage garnishment.
Effective April 3, 1994, wages of the military may be garnished. A judgment must be obtained in the state or county in which the debtor works and service must be made on the payroll office in the location where the debtor works. The only exception to this garnishment might be if the service member is stationed in a state that prohibits garnishment.
You can write to a collection agency demanding they not contact you anymore regarding a specific account. The Federal "Fair Debt Collection Practices Act" (FDCPA) states,
"If a consumer notifies a debt collector in writing that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except - (1) advise the consumer that the debt collector's further efforts are being terminated; (2) notify that specific remedies may be invoked; (3) that the debt collector or creditor intends to invoke a specified remedy."
Make sure, in your letter, you mention you are aware of this federal law and this provision of the law. If you have questions about this act, call the Federal Trade Commission's Consumer Response Center at 877.382.4357. Be sure to send your letter to this collection agency by certified mail, return receipt requested so you have proof they received your "cease and desist" letter.
Please keep in mind that this doesn’t mean that you don’t owe the debt and it will not stop the creditor from pursuing further collection efforts.
You’ll need to seek the services of an attorney for answers specific to your case. Each state has their own restrictions on garnishment of wages and only an attorney from your state can give you correct answers. You might also be able to get answers from a consumer protection office in your state.
Yes, there are laws to protect consumers from harassment. For example, debt collectors may not: use threats of violence or harm; publish a list of consumers who refuse to pay their debts (except to a credit bureau); use obscene or profane language; or repeatedly use the telephone to annoy someone.
However, what actually constitutes harassment would be up to the courts to decide, if you chose to sue a creditor for harassment. Some courts might feel what this creditor/collector has done is harassment while another court would consider those collection tactics a routine collection practice.
We recommend you visit the Federal Trade Commission’s consumer protection website. There, you can find additional information and resources covering your rights when interacting with a debt collector.
The federal Fair Debt Collection Practices Act (FDCPA), and most state collection laws prohibit collectors from calling before 8am or after 9pm, unless you agree.
The FDCPA, however, only regulates "debt collectors", described by the FDCPA as any person, other than the creditor, who regularly collects debts owed to others. For FDCPA purposes, a debt collector generally means collectors working for collection agencies and attorneys who collect debts for creditors. The FDCPA states a debt collector may not contact you at unreasonable times or places, such as before 8am or after 9pm, unless you agree. A debt collector may not contact you at work if the collector knows that your employer disapproves.
Each state sets its own collection laws that are similar to the FDCPA. And state collection laws cover all collectors whether they work for the creditor or whether they work for a collection agency. To try and find out what the collection laws are in your state, you will need to seek the services of an attorney. Your state Consumer Protection Office might also be able to assist you.
It is standard procedure not to contact a person prior to repossession. Imagine what it must be like to repossess a vehicle. Remember, - it’s not personal; the person is only doing the job they were hired to do. Nevertheless, it’s sometimes human nature to “shoot the messenger” and the repossessor never knows how a person will react. Alerting the car owner that a repossession is imminent may only cause further difficulties.
A “deficiency balance” is the difference between what the lender sold the car for and what you owe on the loan. This can occur if the lender auctions off the vehicle and the highest bidder doesn’t pay enough to cover the loan amount. Even though you don’t have the car anymore, you have to pay the balance or risk legal action.
The repossession will remain on your credit report for up to seven years. If you don’t pay the deficiency balance in a timely manner, this could negatively affect your credit report as well.
Many people are afraid to talk with their creditors, fearing that they will call attention to their delinquency. However, talking with them can only help as they already know you’re delinquent. Your best bet is almost always to call your creditor to discuss your options before your property is repossessed.
Additionally, turning the car in yourself might save some collection fees. You would also avoid the stress of wondering when and where the repossession will happen.
Yes, you can try to trade in your car for a car with a lower payment. If you can, the dealer will payoff the balance on your current car. But you might have a difficult time doing this. If your car is close to being repossessed it’s likely that you’re significantly delinquent with your car payments. If so, another lender will probably not want to finance another car for you for fear that you’ll have the same problems making your payments to them.
The best thing you can do is to bring your existing loan current. Then, you could explore the possibility of trading your car in for another car with lower payments.
It’s in your best interest to never leave anything up to trust. Get documentation verifying that the matter has been resolved. If part of the correction involves a negative mark being removed from your credit report, you should continue monitoring your credit to make sure that correction has been made. Under the FACT Act, you can obtain free copies of your credit reports by visiting AnnualCreditReport.com.
If the offered consolidation rate is low you may want to take advantage. However, please note that there are a few disadvantages to consolidating multiple loans into one. First of all, if your spouse were to pass away or become disabled (or if the marriage ended in divorce), you would be responsible for the entire loan amount. In addition, if one spouse would need a deferment, you would both have to qualify. The exact impact it will have on your credit is difficult to determine. Of course, the inquiry will appear on your credit report and too many inquiries can send a "red flag" to potential creditors. Another possible impact could be that it will appear on your individual report that you have increased the amount of debt you’re carrying (by adding your spouse's debt to yours).
The National Council of Higher Education Resources (NCHER) is the nation’s oldest and largest higher education finance trade association. NCHER’s membership includes state, nonprofit, and for-profit higher education service organizations, including lenders, servicers, guaranty agencies, collection agencies, financial literacy providers, and schools, interested and involved in increasing college access and success. It assists its members in shaping policies governing federal and private student loan and state grant programs on behalf of students, parents, borrowers, and families.
Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.
The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.
The Council on Accreditation (COA) is an international, independent, nonprofit, human service accrediting organization. Their mission is to partner with human service organizations worldwide to improve service delivery outcomes by developing, applying, and promoting accreditation standards.
The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.