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Frequently Asked Questions About BALANCE What credentials does BALANCE have? BALANCE is a proud member of the National Foundation for Credit Counseling (NFCC). NFCC membership guarantees agency accreditation, counselor certification, financial integrity, and core policies that ensure quality service. We are accredited by the Council on Accreditation of Services for Families and Children, Inc. (COA). Accreditation by COA takes the guesswork out of selecting a reliable credit-counseling agency by mandating that all NFCC members adhere to a rigid set of standards. How much time should I set aside for a counseling session? You need to allow about an hour for the counseling session. During this session, the BALANCE counselor will review your expenses, including credit card debt, and your income. Together we will develop a budget or a spending plan to help you gain a better understanding of your cash flow, and your priorities. At the conclusion of the session, you will be mailed a copy of the worksheet we develop, as well as a written action plan; detailing steps you need to take to stay on course, or to get back on track. The action plan may include a recommendation to start a debt management plan, to repay your creditors; or it may include referrals to another community organization for other types of assistance. It is important that you be prepared for the counseling session by either completing the worksheet, or having the information available that will be discussed, such as credit card statements, a recent pay stub, and an idea of your monthly expenses. What is a Debt Management Plan? If you are having trouble keeping up with your bills, one of your options might be consolidation of your bill payments. The BALANCE Debt Management Plan allows you to make one payment to all your creditors through us. We will also negotiate with your creditors to stop collection action, lower payments and, in some cases, reduce or eliminate interest and fees. Counseling is free. Should you choose to participate in the Plan, the normal monthly administration fee of $20.00 will be waived because of your membership in State Department Federal Credit Union. The BALANCE Debt Management Plan is a program designed to help you become debt free in four to five years. Since your goal is to eliminate debt, you must be committed to the plan, and stop incurring new debt. All your credit cards must be placed on the plan, and they will be closed for the duration of the plan. We will allow you to keep one major credit card off the plan for emergencies or business travel. Why shouldn't I just file bankruptcy? Although bankruptcy is at record high levels, it should still be viewed as a last resort, after you have considered every other possible option first. Bankruptcy stays on your credit report for up to 10 years, and may affect your ability in the future to buy a car, rent an apartment, buy a home, obtain new credit , or sometimes, even qualify for certain jobs. We estimate that more than 50% of people filing bankruptcy could have found viable solutions to their financial problems with the assistance of BALANCE. How does this program differ from Chapter 13 Bankruptcy? The BALANCE Debt Management Plan is a 100% pay back to all your creditors and interest is not always stopped just because you are paying through us. Creditors look at our service for consumers to solve their financial problems, rather than suffer the stigma of bankruptcy. Will participation in the Debt Management Plan ruin my credit? Creditors may report that you are utilizing a debt repayment service to make your payments. Depending on your current position, this may be viewed positively or negatively. Taking steps to resolve financial difficulties and following through with them over time can help your credit in the long term. Additionally, on the debt management plan, you are reducing your debt burden, which is a positive, especially when trying to qualify for a home loan. Will my employer know that I have asked for help from you? We will NOT notify your employer that you are working with BALANCE. Can you stop legal action and collection calls? In the majority of cases we are able to work with creditors towards a positive solution that will satisfy everyone, and hopefully stop any legal action. The majority of phone calls from collectors cease as long as you maintain the payment arrangement made through us. How do you determine the amount paid to each creditor? We have been working with creditors for nearly 40 years, and we have policies from most of the major creditors nationwide, detailing what they need in terms of payment amounts, and what they are willing to do in terms of lowering interest, etc. to help you succeed on this plan. Your counselor will be able to provide that information during your session, letting you know what the minimum monthly payment will be to pay all of your creditors. How do I make payments to you to pay my bills? You can mail us money orders or cashier checks. The preferred method, however, is that you provide us with your Credit Union account number, and sign an authorization for us to debit your account on a specific date each month. This is the most convenient method for most of our clients. Do I have to sign a contract? You will be asked to sign a contract if you choose to establish a BALANCE Debt Management Plan. The contract specifies budgeted payments and fees. However, the contract is not legally binding. You can cancel at any time. Will I still receive statements from my creditors? Yes, you will still receive your statements. These will allow you to view the payments we’ve made to each creditor, and to check to see that each creditor is reducing the interest that they agreed to. We ask that you send us copies of these statements about every three months, so we can update your balances in our system, and double check that all payments we’ve sent have been properly posted by your creditors. Can you help me clean up my credit report? No one can remove negative information from your credit report if the information is true. However, through us, regular monthly payments can improve your payment history and your credibility with individual creditors. The main goal is to get your credit improved is a by-product of the program. Visit the BALANCE website for more information. You can also call a BALANCE counselor at 1-888-456-2227 and let them know you are a member of the State Department Federal Credit Union.  |
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