Frequently Asked Questions
Common questions are a daily occurrence here at CreditCardDebtConsolidation.net. With this being said, we’ve taken the liberty to address some common questions that we get asked. These questions may be able to address any questions or concerns you may have regarding these debt relief programs. If by chance some questions arise and you don’t find a response here, please don’t hesitate to contact our company for a more direct response.
Frequently Asked Questions: Debt Consolidation
- When doing debt consolidation, will my accounts be closed?
The accounts enrolled into the debt management program will be temporarily closed. The creditors are reducing the interest rates and minimum payments, and don't want the consumers running around capitalizing in this favor they've done for the consumers. Closing the accounts in order to get out of credit card debt in a matter of months without hurting the consumers credit rating, is understandable.
- Is this a loan?
There are two types of consolidation, there is a consolidation loan and of course a consolidation service. We refer clients to the consolidation service aspect. Meaning when the clients make the minimum payments each month they are then redistributed to the creditors but on the new terms and conditions setup in the program. This is not a loan. The only way a consumer can get a loan is if they own a home and have positive equity in the home they own. Even if this was possible, it's not recommended as the consumer would turn unsecured debt into secured debt.
- Will consolidation hurt my credit score?
No, credit counseling will not hurt a consumers credit score. However, it's never good to take anyone's word for it as they can always fabricate a response to obtain clients. With this said, we've provided a direct link to FICO which at the bottom it clearly states that debt management credit counseling has no impact on your credit score. Here is the link to FICO.
- Can I keep a card outside of the program?
Yes. If you want to keep a card outside of the program, let your advisor know this right away.
- Whats the key benefits to consolidation?
The primary benefit to consolidation is the reduction of minimum payments, finance charges and of course interest. By enrolling into consolidation, consumers will find that a majority of the new minimum payment will go towards the actual balances. Here are some more benefits to consolidation.
Frequently Asked Questions: Debt Settlement
- When doing debt settlement, will my accounts be closed?
Yes. Settlement is not a program that keeps accounts active. Settlement works by making the accounts purposely fall behind hence the closure of these accounts. The accounts will eventually go to collections, that's what settlement does.
- When will my accounts be settled?
Settlement is not a loan. Meaning, each month the consumer will make the minimum payment and it will be built in a trust account. Overtime, the accounts will be settled.
So understand it could take 1-3 years for the accounts to be settled, it's not a quick fix like a loan.
- Will settlement hurt my credit score?
Yes, settlement works by making your accounts purposely fall behind in order to have the accounts settled. It does not have the accounts stay current, like consolidation would. However, if the accounts are extremely old and already in collections then settlement may possibly help consumers credit situation.
- Will I be harassed by the creditors?
It's possible. We're not going to lie and say no. Since your falling behind, creditor harassment is to be expected. However, there are ways to prevent these calls and we'll give you a few tips on how to avoid creditor telephone calls. See the cease and desist on telephone harassment area.
- Why do people do settlement?
Settlement is often considered because it has the lowest possible payment for all consumers seeking relief. When consumers want the lowest payment possible, settlement is usually the option that provides that lower payment.