Page 65 - Book1E

It is important to understand that a debt management program is not another loan or loan process. An FFEF debt management program uses your money to pay off your creditors; it does not create new debt. Because it is not a loan, FFEF cannot pay your creditors until we receive your monthly payment. FFEF makes an analysis of your cur- rent financial situation and determines a timeline for paying off your debt. Your creditors will receive a payment each month as soon as your monthly payment is received by FFEF. As the balances are paid in full, the payment “rolls up” to the creditor with the next smallest balance. This is the greatest benefit of your debt management program. Roll- up accelerates your payments, shortens the time you are in debt, and decreases the amount of money you will pay before you are debt free.
A monthly automatic withdrawal from your bank account ensures that your payment is received on time. This is the form of payment encouraged by FFEF. You will receive a statement from FFEF every month that shows when your payment was received and how it was disbursed. You should check this statement against the statements you receive from your creditors to make sure your creditors are receiving and recording your payments according to your debt management plan. For the first four months you are on the program, you will be asked to send a copy of your creditors’ statements to FFEF. After the four months, you need only send the statements to FFEF if you have a concern about the account or when, happily, the balance has been paid in full. A team of certified counselors will be available to answer any questions you have or help you with concerns about your creditors. You will be given a toll-free number to use when calling.
Once your creditors have agreed to your debt management plan, it is important that you make consistent, timely payments. If your pay- ments are not made on time, you may lose the progress you have made on paying down your debt, as well as the lower interest rates and fee waivers that were negotiated for you. If you fall behind on your payments, you may not be able to have your accounts reported as cur- rent again, even if you start over with a new credit counseling agency.
Is a Debt Management Program for You?
57