ACCI Frequently Asked Questions
How will ACCI (DMP) help me?
A debt management program (DMP) allows you to make a single monthly payment that will be dispersed to your creditors. This simplifies life by taking away the need to individually pay each of your creditors.
Several creditors who participate in the program will allow you to lower your monthly payment. After you make several payments creditors may lower or eliminate interest or any late charges, and the harassing collection calls should stop. More of your payment will go to lowering your debt, and will get you out of debt sooner.
How will this program affect my credit?
If your credit report reflects late or missed payments, then this program will facilitate on-time monthly payments, which will thus improve your record. If you were late in the past, many creditors will report you as current if you make all your payments on time when in this program.
If you have never missed a payment, then sending reduced payments to creditors or lowering your interest rate through a DMP could stain your credit report. A creditor may report the reduced payment as late or show that the payment was done through a debt management program. Since this plan purpose is to get you out of debt, lenders may not issue you new credit cards until you have completed the plan.
What information do I need to enroll?
To enroll in the ACCI debt management program, please have:
- Details on your unresolved unsecured debts. Make sure you gather together
your most recent monthly statements.
- A detailed account of your monthly expenses and income information to help you put together a budget.
- Your bank account information to use our automatic bank draft system.
Will a debt management program stop collection calls?
Collection calls will cease after the third consecutive payment with the debt management program. If you receive collection calls after your creditor has posted three payments, please e-mail us with the name of the creditor and the last four digits of the account number so we may investigate this problem. Remember, your creditors are large organizations. Sometimes the department that is calling you hasn't been notified of your enrollment status.
What is ACCI?
American Credit Counselors is a not-for-profit debt management organization
dedicated to helping individuals and families in their goals to become debt-free.
We provide the highest level of customer care, offer you the ability to pay
electronically, issue you monthly statements, so you can track your payments
and progress, and commit to provide you with ongoing support and counseling
to help you stay debt-free. ACCI is committed to respecting your privacy and
maintaining your anonymity.
Why am I still receiving calls and fees from my creditors about my accounts?
When you first signed up for the program, we sent proposals to the listed creditors. You may continue to receive collection calls and fees until you have made a minimum of three consecutive payments, if your account was showing late payments when you began the program. Once you have made consistent payments, depending on creditor guidelines, the creditor will review your account and may re-age it or return it to current status.
There is a chance you will receive collection calls and fees until the account status is altered to current status. If you continue to get collection calls after three consecutive payments on our program, please tell your creditors to call us to verify enrollment. Please inform us if you can make an extra payment to bring your account up-to-date.
We recommend that when you contact your creditor, change your due date to at least 21 days after your payment on the program to allow time for your creditors to post the payments that we send them.
Am I permitted to still use credit cards if I am participating in a debt management program?
The goal of the program is to become debt-free as soon as possible, so creditors
participating in the program will make your accounts with them inactive at the
same time as granting you our program's benefits. You will not be able to use
those creditors credit cards. You may want to hold on to a credit card not participating
in the program for emergency reasons.
Can I speak with someone before I enroll in the program?
We are here to assist you every step of the way. Just click on the contact us link and you can reach us by phone, e-mail, etc.
When will you begin paying my bills?
It's your choice. You can schedule your first payment to be debited within three business days and up to 30 calendar days after you date of enrollment. Your payment dates must be between the first and the 28 th day of each month. If your debit date falls on a weekend or holiday, the debit will occur on the next business day. Payments are then distributed to your creditors after an authorization period.
When is my payment due?
When you enroll in a debt management program, you select the payment date that
is best for you. You may choose any day from the 1st to the 28th of every month.
You are required to choose a payment date within 30 days of enrollment for the
first payment date.
How do I understand my creditor statements?
When comparing statements from a variety of creditors, you will notice that even though they look different, they have many similarities.
Here are some important tidbits of information on the front and back of the statements to help you better understand your credit card account:
Annual Percentage Rate (APR)
The APR is the amount of interest you pay on an annual basis. The higher your interest rate, the higher your finance charges will be. On most credit card statements, the APR is shown as both the APR and either a Daily Periodic Rate or a Monthly Periodic Rate.
Finance Charge (Interest)
A finance charge is what you pay a lender for using credit. It is the interest you pay on the unpaid balance of your account. The most common way to calculate a finance charge is the average daily balance. When using this method, the average amount of debt you have in your account each day is used to determine the monthly finance charge.
The formula to calculate Monthly Finance Charge using the Average Daily Balance is:
Average Daily Balance x Daily Periodic Rate x Days in Cycle = Monthly Finance Charge
Your Daily Periodic Rate is found near the bottom of your statement where the finance charges are explained.
Minimum Payment Due
The minimum payment is the amount mandatory to pay on credit card accounts for each billing cycle. If you pay at least this minimum payment by the due date, you will remain in good standing with your creditor.
The creditor sets this payment amount by taking a percentage of your new balance by using a formula specific to their company. One bank may decide your monthly payment by using a formula of 2% of the outstanding balance, while another may be 2.5% of the outstanding balance.
Late payments are noted on your credit report. Generally, you should pay as much as you can to avoid increased finance charges. If your goal is to pay off the bill and minimize fees, pay more than the minimum amount each month.
New Balance
On a credit card account, the new balance is usually what you still owe. Generally, it is determined by beginning with the balance from the previous month, subtracting any recent payments or credits made to the account, and then added new charges, fees, and finance charges for the current billing cycle.
Grace Period
A grace period is the number of days you have before a credit card issuer starts charging you interest on your new purchases. Make sure to read the fine print on your monthly statements to see what the grace period offered by the creditor is.
Credit Line (Credit Card Limits)
A Credit Line is the maximum debt permitted on a credit card. Your maximum credit limit and your available credit limit are stated on each credit card statement. When using a revolving credit account, it is your choice to pay either entire amount due during a monthly billing cycle or distributing repayment over several months by paying at least the minimum payment. You are permitting to make charges on the account provided that you pay, at least, the minimum payment due each month and do not surpass your credit limit.
If your maximum credit limit is too high, ask the card issuer to lower it to a level that makes you more comfortable. High credit lines could hold you back from getting a loan. Even though, you don't have plans to charge to the maximum, potential lenders may view a high credit limit as a negative when reviewing loan applications. The lender could see the credit as available to you and decide that you can use it instead of giving you a loan.
Due Dates
Most credit cards have a grace period when the balance from the previous bill has been paid in full. You will not have a grace period if you haven't paid your credit card in full the previous month. When you pay monthly bills in full, no interest charges on new purchases you make during the billing cycle will incur.
If you do not pay off your monthly balances in full, you are faced with more expenses. Interest charges are applied to the previous balance and, in addition, to any new charges you make before the next bill is due. As soon as you make a new charge, interest accrues on that purchase.
When you get a cash advance with a credit card, there is never a grace period, even if you paid the previous balance in full.
We suggest that you pay your bill in full each month to take advantage of the
grace period. If unable to pay in full each month, pay early in the billing
cycle to lower the average daily balance used to calculate your finance charge.
What is a secured credit card?
In a secured credit card, as opposed to an unsecured credit card, a savings deposit is required as collateral. To get a secured card, you deposit money into a savings account. According to the policy of the creditor, you may not be permitted to withdraw this deposit until the account is closed.
There may be an application or processing fee to open a secured credit card. Annual fees may be high. The credit limit may start out very low, such as 00 or 00. The interest or finance charge is generally higher for secured credit cards. If you don't pay the bank on time each month, the creditor may withdraw the amount you owe from the savings deposit.
A secured card is not always the method of choice, but it may be a suitable choice if you have a poor credit history. When you pay your bill on time each month, you will build a positive credit history.
What benefits will I receive?
ACCI is designed to help accelerate your getting out of debt sooner. Debt management programs are administered by not-for-profit organizations that help you become debt free by:
- Possibly reducing interest rates, so more of your monthly payment goes toward the principle balance.
- Consolidating all of your credit card bills so you only have to make one monthly payment.
- Taking away late fees.
- Bringing your accounts back to current, from delinquent.
- Eliminating calls from collectors.
- Providing you with educational information to improve your credit history.
To receive these benefits, creditors require you to at least make three consecutive payments on our program before they apply benefits to your accounts.
Remember, a DMP isn't a loan and it will not have the same long-term circumstances on your credit report as a bankruptcy.
Why have I lost my benefits?
Your creditors may taken away your benefits due to the following reasons:
- Missing a payment.
- Paying outside of the program. You can lose program benefits if send payments to your creditors outside the program. Avoid sending payments directly to your creditors. Contact ACCI if you need to make extra payments and we can increase your next payment amount.
- Opening new credit accounts. When you open any new accounts after joining the program, you could jeopardize your benefits.
Please contact us if you are not receiving benefits, you haven't missed any payments, and have made more than three consecutive payments on the program. An ACCI representative will contact your creditor concerning your benefits and then we will contact you with a resolution.
What are my current balances?
ACCI does not maintain the current balances on your accounts. Please review your most recent creditor statements for your most recent balance. Please contact ACCI by email or phone to remove creditors as they are paid in full.
May I change the monthly payment amount?
New applicants, as you complete your enrollment, have the option to increase your monthly payment amount to pay off your debt faster. Once you complete enrollment, you still have the option to increase your monthly payments, but you will not be able to lower the payment once it has been submitted to you creditors. To lower the payment at any time during the debt management program, we suggest you wait until you have made your third consecutive payment. At that time, you will be able to lower the payment if necessary in the future.
How long will it take to complete the program?
You will receive an estimate of your repayment terms with your enrollment documents. Most clients can pay off their debt within three to five years, although, your experience may differ depending on your creditors and the amounts due to them.
How long will it take for the creditors to accept the proposal?
Creditors receive proposals within seven to ten days after your enrollment.
It usually takes four to seven weeks for them to process the proposal. Often
creditors may notify us when the proposal is declined. We will research the
cause and work with you and your creditors to make changes and have the proposal
accepted.
How will my creditors know I joined a Debt Management Program?
When you enrolled, we notified your scheduled creditors that you joined a debt management program in a proposal, including your account number and open balance provided on the enrollment forms. Most often, creditors accept proposals.
A creditor may decline a proposal based on an invalid account number, an incorrect open balance, or creditor information. If this happens, we will inform you of any requested changes to your account, even if it is a possible payment increase.
How do I make payments?
ACCI uses an automatic bank draft, an automatic debit made from your checking or savings account on a day that you specify. This ensures that payments are received without mail delays or mishandling. Your payments will be on time, improving your payment history.
What do I do if there are errors on my credit report?
You cannot erase a bad credit history. Positive and negative accurate information will not be removed from your credit report. In reality, correct information remains on your credit report for seven years, and bankruptcies can appear on there for up to 10 years. You may replace the bad credit information with affirmative information by making payments on time. Credit repair is identifying and correcting inaccurate information.
You can request a copy of your credit report from:
- Equifax: 800-685-1111
- Experian: 888-397-3742
- Trans Union: 800-916-8800
Once you have received the credit report, review it carefully. Make sure all the information listed is accurate. Review your date of birth, the listing of your creditors, and your payment history with each creditor.
Why is my bank information necessary?
Your bank account information is used to set up automatic bank draft, your monthly automatic debit. This is a convenient way to make certain you will have consistent and on-time payments.
How do I payoff an account?
Please call your creditor for the payoff amount.
- Contact us to increase your payment to pay off the payment amount.
- Have the name of the creditor handy.
- Provide us with the last four digits of the account number.
- Make sure to give us instructions on how to direct the creditor's payment between the remaining creditors.
Should I continue sending payments to my creditors after I enroll?
Yes, you must continue to make payments until each creditor posts the first payment with the program.
When you participate in a debt management program is it treated the same as filing bankruptcy?
No. A debt management program is a positive way for you to not have to file
bankruptcy. It is recorded as a voluntary agreement with your creditors to structure
a consistent repayment schedule in exchange for the lowering or removal of interest
and fees.
Or the other hand, bankruptcy is a ruling in a federal court in which the assets
of an individual in financial difficulty are sold and the individual is relieved
of further responsibility to their creditors. A negative point, bankruptcy will
appear on your credit report for at least seven years, sometimes up to 10 years.
While I am enrolled in a debt management
program, can my creditors take legal action against me?
Yes, your creditors have the right to take you to court, even when enrolled
in a DMP. Please, contact us immediately if this unfortunate event occurs. When
you go to court, your payment history with the DMP can serve as positive evidence
in your efforts to repay debt.
Do
you resolve settlements?
ACCI does not negotiate settlements. Normally, creditors will only offer settlements
in return for very short repayment period for the amount due, one that takes
place within one to three months time.
A settlement may reflect disapprovingly on your credit report, depending upon your payment status with the creditor.
In addition, the unpaid balance may be reported as taxable income. This program
is intended to assist you resolve your debts and re-establish your credit history.
The combination of these two items is a necessary step for you to build a positive
credit status.
What
will my interest rate be?
Creditors determine the interest rates. Some creditors do this on a case-by-case
basis. Others have a predetermined rate that they charge clients on any debt
management program.
Once enrolled in the program, we will send a proposal to your creditor for your benefits. Benefits may include reduced interest rates, eliminated fees, and bringing your account to current status. Then, your creditors apply the new interest rate after three consecutive payments on the debt management program. You will see your new interest rate on your creditor statement.
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