Frequently Asked Questions:
Why is CCCS of Buffalo unique?
· Non-profit Agency
- Fees are low and cover operational cost only
· Member of the Better Business Bureau
- CCCS of Buffalo has an A+ rating
· Member of the National Foundation for Credit Counseling (NFCC)
- The NFCC is the nation's largest and longest serving national nonprofit credit counseling network
· Accredited by the Council on Accreditation
- Having COA Accreditation means you are working with a Credit Counseling Agency that is among the best in the industry
- CCCS holds itself to gold standards of service delivery, ethical practices and accounting procedures
· Licensed by the NYS Banking Department
- CCCS passes strict accounting and service related standards
What are the benefits of a Creditor Repayment Plan?
· Interest rates may be lowered (in some cases drastically)
· Minimum monthly payments may be lowered
· Debt will be paid, in full, in 5 years or less
- Compared to 20+ years when paying creditors directly with higher interest Rates
· Payments will stay current & balances will be paid in full
- Better for credit score
· Stops late and over -limit fees
· Reduces and/or stops creditor calls
· One convenient monthly payment
What are the benefits of entering a CRP with CCCS of Buffalo?
· Call, email or speak in person to one of our friendly Client Care Specialists
- Able to assist with communication to your creditors
- Free access to your account online
Free Financial Education Course Money In Motion:
· Learn further about:
- How to create and maintain a budget
- Maintaining a good credit report and credit score
- One of the lowest fee structures in the country
- No pre-payment or termination fees
Plan Completion Review:
· After completing your Creditor Repayment Plan, meet one-on-one with a Client Care Specialist to:
- Review your current credit report and score (free!)
- Learn strategies on how to increase/maintain your credit score
- Obtain resources to help you build a bright financial future
Can I still come in for an appointment?
Absolutely. You may schedule an appointment with us even if you are initially filled out your information online. Please call us at 716-712-2060 to set up an appointment.
Can I keep one credit card aside for emergencies only?
Possibly. You must disclose all debts, and after discussion with your counselor you may be able to keep a credit card off the plan depending on your circumstances.
How is my Credit Report Affected?
Over the long term, a plan could increase your credit score due to paying down a large amount of debt in a short period of time. We cannot guarantee this however, as your credit score has many components and it will depend on your payment history not only with CCCS, but with all of your other obligations. You must stay current on your credit card payments with CCCS, and current with any secured debt off the plan (mortgage, auto loans, etc).
Initially, a repayment plan could decrease your score due to the fact that the creditors are closing your accounts which will affect your credit utilization ratio (current balances compared to your credit limits). When a credit card is closed, the total amount of credit available to you is decreased, which in turn may decrease your credit score slightly.
The fact that you are on a creditor repayment plan does not factor in to your credit score, however your creditors could report that you are paying through a third party. If you apply for a secured loan while on a CRP, it is up to the lender how they interpret this statement as far as extending you credit. Often lenders will ask you to get a letter from us stating your payment history.
Will creditors continue to charge interest while I am on a CRP?
Most creditors lower their interest rates significantly. However, it is important for you to know that not all creditors stop fees or reduce interest rates.
What if I have extra money?
We encourage our clients to make additional payments toward reducing their debt after funding an emergency savings account. Paying extra toward your debt allows you to decrease the length of time on a CRP and reduce the interest you pay to creditors. There are no penalties or fees for paying off your debt early. Additional payments do not reduce future payment amounts, but they do reduce the amount of time you will be on a CRP.
How are you different from Debt Settlement Companies?
Debt settlement is a process through which your creditor agrees to accept less than the full amount owed, yet considers the balance as paid. Settlement companies often advertise that they can negotiate reductions of 50 percent or more in the debt you owe, however there are many negative consequences.
Settlement companies charge significant fees. Some debt settlement companies’ fees will be a percentage of your total debt – typically from 13-20 percent. Another option is to base their fee on the amount of debt reduction they can negotiate. Fees under this model can be as high as 35 percent. In addition, many settlement companies also charge a monthly fee that can range from about $19 - $89 a month for the entire program. Either way, it is not uncommon for settlement fees to total thousands of dollars.
Some debt settlement companies front load their fees. In other words, they collect a large part of their fee before you receive any benefit. Much of the money you initially deposit goes to pay the settlement company to satisfy its fees. It can be months after you start the settlement program until your creditor receives any payment. With CCCS, other than a monthly fee - $35 per month – your entire payment always goes toward reducing your debt.
A settlement company may suggest that you stop paying your creditors and instead begin making deposits into a special third-party account. The settlement company will attempt to negotiate a settlement offer with your creditor once enough money relative to the debt is on deposit. This may take six months or more, although the exact length of time will vary with circumstances. During this time, the balance on your debt can continue to grow if interest and various penalty fees continue to be charged by your creditor. As a result, you may owe more than when you started and your credit may suffer because of your failure to make any payments on your debt. Even worse, legal actions such as wage garnishment or a judgment may be filed against you during this time.
Debts paid off through settlement will generally show “Paid by Settlement” on a consumer’s credit report. If you later apply for new loans or credit, when reviewing your credit report the prospective lender(s) will see that a previous debt was paid by settlement, indicating that your repayment did not cover the total debt that you owed, but that your creditor accepted a lesser amount.
Your credit score is based on information contained in the credit report, with the highest consideration given to how you repay your debts. If you’re not repaying the creditor or have missed payments, it will show on your credit report and potentially lower your credit score significantly.
You may be responsible for taxes on the forgiven debt. If the forgiven debt totals $600 or more, you will generally owe income taxes on the amount forgiven, substantially reducing the total savings from debt settlement.
I have more questions!
Please contact your counselor with any further questions you may have. If you have already made your first payment, please contact Client Support at 716-712-2070.