Frequently Asked Questions Credit Counseling | Debt Management | Housing Counseling | Bankruptcy Counseling General FAQ's What is Take Charge America? Take Charge America is a non-profit organization that helps individuals achieve financial freedom through education, customized credit counseling and debt management services. The agency’s mission is to educate clients and the general public on financial issues to help them achieve self-reliance, financial stability and financial independence. What services does Take Charge America offer? Take Charge America provides financial education and tools to consumers interested in improving their financial future. Take Charge America assists clients with a variety of issues, including: developing effective financial management skills; budgeting to meet living expenses; managing credit cards and other unsecured debts; and balancing checkbooks. How do consumers begin working with Take Charge America? Consumers struggling with debt or financial management are encouraged to call a certified Take Charge America counselor at 1-866-528-0588 or complete an online application. Counselors offer a free debt review and advise consumers on their financial options, which may include a debt repayment plan. If a financial management plan is agreed upon, counselors continue to work with clients on a one-on-one basis to help them become debt-free. What is the average length of time it takes for consumers to pay off their debt? Each Take Charge America client works with a counselor to determine a financial plan that best suits his or her individual needs. The time it takes to pay off debts varies. Often, debts are paid in half the time using Take Charge America, after which, the consumer is armed with the financial knowledge and tools to best manage their finances in the future and avoid incurring additional debt. The average client is on a debt management plan for 33 months, with the maximum time being 60 months. Is Take Charge America held to any industry standards to ensure best practices and safety of consumers? At Take Charge America, customers always hold the first level of priority, keeping them satisfied and well-informed is the primary focus of all Take Charge America staff. Take Charge America requires all staff, from entry-level employees to executive managers, to train in personal finance, credit counseling and consumer debt management, accredited by Rio Salado College in Phoenix. Furthermore, each Take Charge America credit counselor must complete a rigorous training program in order to become a nationally certified credit counselor. Certification is provided by the Association for Financial Counseling and Planning Education (AFCPE). This ensures that clients receive accurate information from the most skilled professionals. Take Charge America is a member of the Association of Independent Consumer Credit Counseling Agencies (AICCCA), a national membership organization established to promote quality and consistent delivery of credit counseling services. How does Take Charge America manage its relationship with clients? After the initial consultation, to determine the best financial management solution, each client is assigned a dedicated financial counselor. This counselor maintains a one-on-one relationship which includes regular contact to best meet individual needs. Clients frequently provide valuable feedback to the organization, and by using this information, Take Charge America continues to develop and refine services. Take Charge America receives a tremendous number of testimonials from its many satisfied clients, and many of the organization’s new customers come from client referrals. Is there a fee to call Take Charge America? There is no fee for the initial consultation with Take Charge America. After reviewing a customer’s debt and financial situation, certified counselors advise clients of any fees to enroll in a debt management plan. Fees typically include a one-time set-up charge and a modest monthly fee, determined by state of residency, which is included in the client’s monthly debt management payment plan. How is Take Charge America involved with creditors? Take Charge America teams with major creditors around the nation to help consumers who are experiencing financial hardship. When a creditor identifies a client with a multi-faceted problem that will not be solved through an internal repayment program, they refer consumers to Take Charge America for a comprehensive assessment and solution that fits the consumer’s personal circumstances. Through their work with Take Charge America, the creditors become a resource and part of the overall solution for the consumer. Who does Take Charge America typically serve? Take Charge America consults with all individuals in need of financial assistance, from those facing sizable debt to those who just need help creating and maintaining a livable budget. The company offers Take Charge America budgeting software along with personalized services and tools to help consumers meet their individual needs. In addition, Take Charge America actively engages in partnerships with a variety of businesses and organizations to enhance the financial situations of members of such groups. The organization regularly teams with creditors, credit unions, employers, military and government groups and colleges and universities. Does Take Charge America help those facing bankruptcy? As bankruptcy is a legal matter requiring assistance beyond financial counseling, Take Charge America refers those facing bankruptcy to alternate organizations that are equipped to handle serious legal issues. What makes Take Charge America unique in their industry? Take Charge America is one of the nation’s largest and most respected financial education, credit counseling and debt management organizations. Each member of the Take Charge America team prides themselves on delivering exemplary standards of customer satisfaction. Not only are employees nationally certified credit counselors and fully trained in financial counseling, Take Charge America is the only organization of its kind to receive a Better Business Bureau Ethics Award in recognition of its business ethics and integrity in the marketplace. The company continues to earn recognition by several other distinguished organizations for its excellence in the industry, setting it apart from the competition. Where is Take Charge America headquartered? Take Charge America is headquartered in Phoenix, and serves clients across the nation. Does Take Charge America have any charitable affiliations? Take Charge America is a non-profit organization. Additionally, the organization supports the University of Arizona’s Norton School of Family and Consumer Sciences through the Take Charge America Institute for Consumer Financial Education and Research (TCAI), created to improve consumer financial well-being through research and outreach programs. Also located within TCAI is the Family Economics & Financial Education (FEFE) program, solely sponsored by Take Charge America. The program was developed to provide financial education for high school students and offers no-cost curriculum materials to educators across the nation, along with skills to effectively teach family economics and finance. Credit Counseling FAQ's What is credit counseling? Credit counseling is a free service that helps distressed borrowers find solutions to their financial challenges. During the initial consultation, our certified credit counselors conduct a confidential, personal financial assessment in order to determine the best course of action. The counselor will recommend steps to achieving your goals and offer educational resources to help you develop effective spending habits, budget to meet living expenses and manage personal debts. How do I know if I need credit counseling? If you feel overwhelmed with your finances, are struggling to pay your bills, have missed due dates with your creditors, or are anticipating a hardship in the near future, you may benefit from credit counseling. A certified credit counselor can review your personal situation and determine the appropriate solution to help you reach your goals. Is there a fee for credit counseling? There isn't a fee for credit counseling. Clients who opt for a debt management plan may be charged a one-time set-up fee and a modest monthly fee, if applicable. Your credit counselor will provide you with a recommended solution and notify you of potential fees during the initial consultation. Do I need to be behind in credit payments in order to seek credit counseling? No, any consumer can benefit from credit counseling. Following a confidential financial assessment, our credit counselors develop a plan of action and offer educational resources to help you manage your debts and save for the future. All plans are customized for the unique needs of each client. How long does the credit counseling process take? The length of the credit counseling process is determined by individual circumstances and the depth of counseling required. On average, the initial consultation and financial assessment takes 45 minutes to 1.5 hours. Please contact your credit counselor if you have additional questions once the initial consultation is complete. How do I get started? Complete the online application or call us at (866) 528-0588 to speak with a certified credit counselor. Please be prepared to provide your total monthly income, total debt owed and financial details on all monthly living expenses. Debt Management FAQ's How can TCA's debt management services help me? Since 1987, TCA has been helping consumers around the country manage their finances. To find out if a debt management plan (DMP) is right for you, fill out the free debt assessment. A certified credit counselor will guide you through the process. What fees are associated with a DMP? The initial consultation and debt review are free. If you enroll in a DMP, a certified counselor will advise you of any fees. These fees typically include a one-time set-up fee and a modest monthly fee, which is included in the monthly debt management payment. Will my credit accounts be closed when I start a DMP? Most creditors will close accounts when you enter a debt management plan. If you decide to enroll in a DMP, we suggest you contact creditors first to request accounts closed "at consumer request." Can I open new lines of credit while enrolled in a DMP? We recommend that clients enrolled in a DMP do not open new lines of credit until the current debt is cleared. Creditors may discontinue benefits if you do. Vehicle and housing loans are unique and may be necessary while enrolled in the program. Our certified counselors will work with lenders to assist with such loans. Do I continue to pay creditors during the interim period before the program begins? We recommend that you keep all accounts current or continue making payments until the debt management agreement is officially activated with TCA. What should I do if creditors call during the DMP process? Prior to enrolling in a DMP, explain to creditors that you plan to take part in the program. Once enrolled, you can refer all creditor inquires to Take Charge America. Can secured loans and IRS payments be included in a DMP? Mortgages, vehicle loans and other secured loan payments will be included in a personal budget, but they will not be placed in the program. Student loans and IRS payment can be included in the program at the regularly scheduled (not reduced) fixed payment amount. How long will it take to pay off my debt while enrolled in a DMP? Every situation is unique. The length of the plan will depend on a number of factors such as accuracy of creditor balances, finance charges and any debt added to the program at a later date. Housing FAQ's Is there a fee for Housing Counseling at Take Charge America? Take Charge America is a non-profit agency and does not charge any fees for foreclosure prevention or pre-purchase counseling. Reverse mortgage counseling has a fee of $125 to receive a Reverse Mortgage Certificate of Counseling. What options are available for homeowners at risk of foreclosure? Options are determined on a case-by-case basis and depend on the type of loan, loan status, lender and the homeowner's financial situation. Arizona residents who are experiencing difficulties meeting their mortgage payments are encouraged to call Take Charge America at (623) 266-6382 or (866) 987-2008. Homeowners living outside Arizona can call the Homeowner's HOPE Hotline at (888)995-HOPE(4673). 60+ Days Late On the 61st day, the loan payment is two months past due, and if the collections department has not been able to collect or make acceptable payment arrangements, the homeowner's account will be turned over to the LOSS MITIGATION DEPARTMENT. Loss mitigation is a division of the mortgage company that will try to find an acceptable plan to get the homeowner back on track with mortgage payments. The homeowner will begin to receive letters requesting him or her to call the department. More options will become available during this period. 90+ Days Late On the 91st day (in AZ), a third party TRUSTEE takes over the delinquent account. The trustee will send a "Notice of Sale" stating that the property will be sold 90 days from the date the Notice was filed and recorded. The mortgage company will not send any additional letters. It is now solely up to the homeowner to contact the trustee directly, or through a non-profit housing counselor. Unless the homeowner acts quickly, the house will be sold at auction on the date specified. *This information is from the Arizona Foreclosure Prevention Task Force. How long does the housing counseling process take? The length of the initial counseling session averages 45 minutes to 1.5 hours. It can take a lender several months to work out loan modifications. A Take Charge America housing counselor will guide the homeowner through the entire process. What documents does the homeowner need to provide at initial housing counseling session? In order to assist each homeowner, Take Charge America is required to obtain authorization forms along with loan documents, a detailed budget, hardship letter, two months most recent bank statements, and two most recent pay stubs. These items must be available in order to complete the initial counseling session. Once the foreclosure counseling process has started, should a homeowner continue to talk with their lender? Yes, it is important for a borrower to communicate with their lender when facing financial hardship. During foreclosure counseling, many lenders will contact the homeowner to review and verify the information submitted by the housing counselor. Any loan modifications or workable solutions are completed between the lender and borrower. The housing counselor provides guidance through the process and ensures the homeowner is financially knowledgeable to accept or decline any lender approved loan modifications. What is a short-sale? A short sale happens when the lender accepts an offer from a buyer on a delinquent property for less than what is owed on the loan. Most lenders require the home to be on the market for at least 90 days seeking fair market value before a short sale offer is reviewed or accepted. What is deed-in-lieu of foreclosure? Deed in lieu of foreclosure is an agreement made between the delinquent borrower and the lender. If the lender agrees to forgive the loan, the borrower agrees to give back the keys and deed to the property, and move out. What are foreclosure fees? Once a lender starts the foreclosure process, various legal fees are typically added to the loan balance. These fees include, but are not limited to, court filing fees, fees for process servers, lawyer fees, various auction fees, inspection fees and eviction fees, if applicable. What is the foreclosure process in Arizona? 30+ Days Late From the 31st day, the COLLECTIONS or LOAN SERVICING department of a mortgage company will start calling the homeowner to collect past due payments. This division accepts and applies the mortgage payment each month, tracks late fees, monitors escrow funds when included in the payment, and will pay the taxes and insurance when due. Bankruptcy FAQ's What are the types of bankruptcy? There are two main types of bankruptcy designed for consumers, Chapter 7 and Chapter 13. Chapter 7 is also known as liquidation. This bankruptcy discharges, or removes, your unsecured debt. This means if you own property that is not exempt under your state's laws, it may be sold, or liquidated, to pay back some of your debt. In order to be eligible, you may not have previously received a bankruptcy discharge in the last eight years and you must pass the "means test," a formula that subtracts your allowed expenses and debt payments from your current monthly income. If the income left over is below a certain amount, you may be eligible to file for Chapter 7. If you do not pass you will need to consider Chapter 13. Chapter 13 bankruptcy is also known as reorganization. This means you may keep all of your property, as long as you make monthly payments over three to five years to repay all or some of your debt. In order to be eligible, you must prove to the bankruptcy court that you can afford to meet your payment obligations. If your income is irregular or too low, the court might not allow you to file for Chapter 13. In order to be eligible, you may not have previously received a bankruptcy discharge in the last six years. How much does it cost to file bankruptcy? It costs approximately $300 to file for Chapter 7 and 13 bankruptcies, which covers the administrative fees. You can check your state's bankruptcy court website for a specific list of fees. If you cannot afford the fee, you may be able to pay installments or secure a waiver as determined by the local bankruptcy court. Do I need an attorney to file for bankruptcy? You do not have to hire an attorney, but bankruptcy is a complex legal process and an attorney can be very helpful. If your goal is to prevent a home foreclosure or repossession of property, an attorney is strongly recommended. How should I find an attorney? It is best to ask family and friends for a referral. If you do not have a referral, contact your local bar association for names. You will want to specifically ask for attorneys who specialize in bankruptcy. Interview more than one, as it is important that you are comfortable with the attorney who represents you. Ask for a fixed price for advisement and filing. How much will it cost to hire a bankruptcy attorney? Prices will vary depending on where you live and the issues that you face. A general estimate would be from $1,000 to $2,000. Most bankruptcy attorneys will provide a free consultation to help you decide whether bankruptcy is a good option for you. If you cannot afford an attorney, ask those you consult with if there are other options for repayment, or free legal assistance in your state or jurisdiction. Are there other requirements to get through a bankruptcy filing? Before filing, you must obtain a certificate from an authorized credit counseling agency indicating that you successfully completed a course on the implications of bankruptcy (you can contact Take Charge America for this education). The fee for this should be no more than $50 for an individual or a couple filing jointly. Before final discharge, you must successfully complete a course in financial management. There are many providers of this course and they can be found at the Federal Bankruptcy Trustees' Web site, www.justice.gov/ust/eo/bapcpa/ccde/de_approved.htm. The fee for this should be no more than $100. Fee waivers are available for both services for those demonstrating need. Will all of my debt be eliminated if I file for bankruptcy? Bankruptcy does not eliminate "non-dischargeable debt." This includes items such as unpaid child support and alimony, most taxes, student loans, damages for convicted crimes, and secured debts backed by collateral such as a home mortgage or car loan. Chapter 13 filers must pay certain debts called "priority debts." These include wages you owe to employees, and certain tax obligations. The Chapter 13 repayment plan must include secured debts, such as a car loan or mortgage, as well as repayment of any payments that are past due. In addition, any disposable income left after making the required repayment must go towards repaying unsecured debts, such as credit cards or medical bills. How will bankruptcy affect my credit score? A Chapter 7 bankruptcy remains on your credit report for ten years and a Chapter 13 remains for seven years. Depending on your credit rating and score prior to the bankruptcy filing may reduce your score by 20% to 50%. Will I be able to obtain credit after filing? You may find it difficult to obtain credit after filing. However, if you had good credit at one time, some lenders may view filing as an advantage since your other debts are now discharged and you cannot file for bankruptcy again for many years. Some lenders may choose to offer you credit, but at higher than average interest rates. Generally, filing for bankruptcy will make it difficult to obtain a mortgage. It may also affect your insurance premiums, job searches, and security clearances. Will bankruptcy help me save my home? If you are at risk for home foreclosure and are unable to obtain a loan workout plan, bankruptcy may stall or avoid foreclosure with an automatic stay. The stay postpones the sale of a home while bankruptcy is pending. However, a lender may be able to obtain a motion to lift the stay from the bankruptcy court. If your foreclosure notice was issued before you were in bankruptcy, the automatic stay will not stop the clock. The Chapter 7 bankruptcy effect on your mortgage is dependent on several factors including the amount of equity you have in the home and how much your state's laws allow you to keep. Contact an attorney in your state to clearly understand your specific circumstances. Once the Chapter 7 bankruptcy is discharged, the lender is still able to foreclose on your home if you do not make your payments and keep them current. Chapter 13 bankruptcy enables you to pay off late and unpaid mortgage payments during the repayment plan. You will need to continue to make your mortgage payments. If you make all the payments up to the end of the repayment plan, you can avoid foreclosure and keep your home. This may or may not include second mortgages or home equity loans, depending on your individual situation. Consult with an attorney about your specific circumstances. Can the bankruptcy Court take all of my property? In a Chapter 7 bankruptcy, certain types of property are exempt from being liquidated in most states. This usually includes, motor vehicles, necessary clothing, necessary household furnishings and goods (a second large HDTV may have to go), household appliances, jewelry up to a certain value, personal effects, life insurance up to a certain value, pensions, part of the equity in your home, tools of your trade or profession up to a certain value, and public benefits (welfare, Social Security, unemployment compensation) accumulated in a bank account. Items that are nonexempt (property that may be liquidated) include: a second or vacation home, a second car or truck, expensive musical instruments (unless you're a professional musician), stamp, coin, and other collections, family heirlooms, high valued jewelry, cash, bank accounts, stocks, bonds, and other investments. What are some alternatives to bankruptcy? You can try to negotiate with your creditors for a workout plan to restructure and payoff the debt. You can seek help from a nonprofit credit counseling agency, which may be able to help you find other options to repay your debt. You may be able to agree to a settlement, which will lower your debt if you agree to pay certain fees. Can I file for bankruptcy more than one time? You can file for bankruptcy more than one time unless: In the preceding 180 days a prior bankruptcy petition was dismissed due to your willful failure to appear before the court You did not comply with orders of the court Your case was voluntarily dismissed after a creditor asked the court to lift the automatic stay You did not receive credit counseling from an approved credit counseling agency You have not waited the required time between filings Are there ways to eliminate tax debts by filing for bankruptcy? Generally, most tax debts cannot be wiped out in bankruptcy. In Chapter 13 you are able to include your tax debt in the repayment plan. If the following conditions exist the taxes may be discharged: Taxes are for federal and state income tax Tax return was due at least three years prior to the bankruptcy filing Tax assessment took place at least eight months before the bankruptcy filing Tax return was not fraudulent and there was no attempt to evade the tax How do I know if bankruptcy is the right solution? If you have explored all possible alternatives and none of the alternatives, such as renegotiation with your creditors, a debt management plan, or debt settlement, then bankruptcy may be your only solution.