Why do
I need credit counseling or credit counselors?
In some cases, you can negotiate with creditors on your own to arrange
payment or have positive information reported to a credit bureau.
However, to get the benefits of lowered monthly payments, lower interest
rates, stopped late charges, and waived over the limit fees, you need
Five Star credit counseling and counselors. As a non-profit organization,
Five Star credit counseling and counselors can secure you these benefits
not usually available to credit consumers.
BACK
TO TOP |
| |
Why can't
I just keep paying off my creditors on my own?
If you keep paying just the minimum to your creditors at the current
interest rate, it will take you much longer than if you paid off your
debt through Five Star credit counseling and counselors. A $10,000
debt usually takes 32 years and $24,500 to pay off, if you are paying
the monthly minimum of 2.5% of the balance at an average interest
rate of 18.5%. Because we may be able to reduce your interest rates,
stop over the limit fees, and so on, it will take a lot less time
to pay off your debt through us. Chances are, in the past, all your
debt payments have just gone to pay off interest. You probably haven’t
even touched the balance! On average, Five Star credit counseling
clients pay off their debts in 3 to 5 years, depending on individual
circumstances.
BACK
TO TOP |
| |
How much
will it cost me to be on the Debt Management Program and have credit
counseling and counselors?
The consultation is FREE to everyone. If you are comfortable with
what we set up for you, we do request a one-time voluntary contribution.
There is also a small monthly service charge to cover the costs of
handling accounts. The monthly service fee is determined by the number
of account a client has on the Debt Management Program. As a non-for
profit organization, Five Star Debt Management depends on these small
contributions to meet our operating costs.
BACK
TO TOP |
| |
How will
joining Five Star Debt Management affect my credit rating?
Most lenders view it as a positive because it indicates that you've
recognized your problem and are trying to resolve it. Fair Issac and
Co. Inc. the company that pioneered the use of credit scores, no longer
gives consumers demerits if they've been through credit counseling.
BACK
TO TOP |
| |
Can I
send in more money once I have a better cash flow?
Of course - you can always increase your monthly payment. The more
you pay, the faster your accounts will be paid off. Just let Five
Star credit counseling and counselors know you want to increase your
payments beforehand so we can figure out which creditors to pay more
money.
BACK
TO TOP |
| |
Should
I pay my bills in the time before I send you my first payment?
That's your decision. We recommend that you do if you can, because
there is a brief negotiation period, after we receive your first Five
Star payment, when we make arrangements for future payments with your
creditors. If you miss due dates for accounts in the meantime, you
are risking penalty fees and negative information being reported to
the credit bureau.
BACK
TO TOP |
| |
Will
I still receive harassing phone calls?
You might the first several months on the program since it takes time
for your creditor’s collections department to find out you’re
with Five Star credit counseling and counselors. If you get a harassing
call, inform the party to call Five Star credit counseling and speak
to your account specialist. If you get a harassing call from a collections
agency that is not part of your creditor’s company, we will
provide you with a cease and desist letter. 3rd party collection agents
must obey this letter, according to the Fair Debt Collection Practices
Act. Make sure you tell your account specialist if you receive any
such calls from a collections agent.
BACK
TO TOP |
| |
Do you
provide loans?
No, we do not provide loans. We assist you through debt consolidation,
allowing you to satisfy current obligations without incurring additional
debt.
BACK
TO TOP |
| |
Is there
a fee for your service?
Yes, however this fee is structured into your monthly payment program,
and the amount of money you save in reduced interest, late fees, and
total monthly expenditures is far below this charge.
BACK
TO TOP |
| |
Will
you repair my credit?
Through the use of our program, your credit rating will show a positive
payment history. Only your creditors can report, in writing, that
you have satisfied your debt obligation upon completion of the program.
BACK
TO TOP |
| |
Can I
consolidate my home mortgage and/or car loan?
No, we work with unsecured debts that are not backed or underwritten
by an asset.
BACK
TO TOP |
| |
What
types of debts do you handle?
Unsecured credit cards & bank loans
Hospital & Medical bills
Collection Agencies
Repossessed Auto Loans
Bills or Rent due from prior addresses
Personal loans from family & friends
BACK
TO TOP |
| |
