Debt Management can be complicated, especially if you don’t know where to start. Below are some of our most frequently-asked client questions about Debt Management Plans.
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 Debt Management Plan?
The initial consultation and debt review are free. If you enroll in a debt management plan, a certified counselor will advise you of any fees. These fees typically include a one-time setup fee and a modest monthly fee, which is included in the monthly debt management payment.
Will my credit card accounts be closed when I start a Debt Management Plan?
Most creditors will close accounts when you enter a debt management plan. If you decide to enroll in a debt management plan, we suggest you contact creditors first to request accounts be closed “at consumer request.”
How will being enrolled in a Debt Management Plan affect my credit?
The Debt Management Plan is not reported to credit bureaus and does not factor into a credit score. However, your score may initially dip when your credit cards are closed. Although people on a DMP typically see their score increase when they make regular payments on time, the plan is not intended to preserve or improve your credit score, credit history or credit record. The impact on your credit may be negative or positive depending on your progress on the plan. If your accounts are past due before you enroll in a DMP or become past due after you enroll in a DMP, your credit history may be negatively affected, and/or your creditors may charge off the accounts.
Can I open new lines of credit while enrolled in a Debt Management Plan?
We recommend that clients enrolled in a debt management plan 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 my 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 Take Charge America.
What should I do if my creditors call during the Debt Management Plan process?
Prior to enrolling in a debt management plan, explain to your 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, student loans, payday loans or IRS payments be included in a Debt Management Plan?
We do not place secured debt, including mortgages and automobile loans, on the plan. Additionally, we do not place student loans, payday loans or IRS payments on the plan. These types of debts will be included as expenses in your personal budget and you will need to pay these creditors directly. If you need help with your student loans, click here.
How long will it take to pay off my debt while enrolled in a Debt Management Plan?
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. Most clients on debt management plans are able to pay off their enrolled credit card debt in five years or less.