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Q. What
would my obligations be
to SPRINGBOARDÃ,®?
When you enroll in our Debt
Management Plan (DMP), you
sign a Debt Management Plan
Agreement. This allows us
to contact your creditors
and make arrangements on
your behalf. You will pledge
to make your deposits on
time and not to incur any
new debt. This is consistent
with our goal of helping
you regain your financial
freedom.
Q. How
would SPRINGBOARDÃ,® communicate
my plan to creditors?
As soon as you complete
arrangements with your counselor,
we will prepare and send
a proposed budget and debt
proration plan to each of
your creditors. This proposal
will list your obligations
and how much each creditor
may expect to receive each
month. Each creditor is
requested to verify the
balance that you listed
with us.
Q. Do you offer debt consolidation?
It's built in to the DMP.
You make one payment per
month to us, which we then
distribute to your creditors.
We do not offer consolidation
loans; ours is a payment
plan. Consolidation loans
usually take longer to pay
off and cost much more in
interest than our Debt Management
Plan. The DMP makes it easier
for you to pay all of your
creditors with one payment,
which we then divide amongst
them. We disburse funds
daily, so you can be sure
your creditors will receive
their payments on time.
Q. When
would my deposits be due?
It's important to make your
deposits on time. Automatic
deduction from your checking
or savings account is the
easiest. We can also accept
payments through Western
Union and debit cards with
either a Visa or MasterCard
logo. You and your counselor
will agree to a specific
date by which your deposit
will be due each month.
In turn, we will schedule
payments to each creditor.
Your creditors will call
us to see how you are doing.
If you expect their cooperation,
you must do your part.
Q. Will
I get a monthly statement?
Absolutely. SPRINGBOARDÃ,®
mails a detailed statement
to you each month. These
statements show the deposits
that you've made to SPRINGBOARDÃ,®,
the payments made to your
creditors, as well as the
approximate balance owed
to each creditor. While
we make every effort to
keep these balances accurate,
it is impossible to do so
all the time. If you join
the DMP, most of your creditors
will continue to send you
a statement. You should
compare your creditor statement
with ours and let us know
if there is a significant
difference.
Q. What
would happen if I were to
run into a problem?
You and your counselor will
agree upon a living expense
spending plan. We know you
will not have any extra
money, and most clients
must make sacrifices. If
you do encounter a difficulty,
we have a team of Client
Support Counselors that
you should call immediately.
We cannot guarantee a solution
to every problem, but your
support counselors are skilled
professionals who will help
you in every way possible.
Q. What
if I owe the IRS?
If you owe any taxes at
the time you come to SPRINGBOARDÃ,®,
you should list them as
a debt so that your counselor
can make arrangements. We
can also prepare your tax
return for a nominal fee.
Q. Could
my creditors still call
me?
Yes they can, but most will
not. Sometimes, when a new
client first joins the DMP,
creditors may be unsure
about the plan and may call
you. We tell all of our
clients not to pay a creditor
outside the plan nor make
a promise to pay. If a creditor
calls you, you must talk
to them; however, be courteous
and help us build their
confidence by making your
deposits to SPRINGBOARDÃ,®.
We will then disburse funds
to them so that they will
get their payments as promised.
The vast majority of creditors
will cooperate fully and
immediately mark your account
as DMP and not call you.
If you get a call from
a collection agency that
is not part of your creditor's
company, we will advise
you to write them to "cease
and desist". Third-party
collection agents must obey
this letter, according to
the Fair Debt Collection
Practices Act, however,
such a letter would not
prohibit them from pursuing
legal action.
Q. What
about interest and/or late
charges?
You and your counselor will
discuss this important issue
during your initial appointment.
Many creditors have special
policies for SPRINGBOARDÃ,®
clients. They recognize
that SPRINGBOARDÃ,® clients
have taken a positive step
to repay their debts and
will stop or reduce interest
and/or late charges. These
creditors can save a client
hundreds or thousands of
dollars during the life
of the DMP. However, if
a client misses payments
or leaves the program before
their debts are paid, the
creditor will start charging
interest again. Not all
creditors stop interest.
We will be happy to answer
any questions you may have
concerning the policies
of the creditors you owe.
Q. How
long would it take to pay
off my bills?
That depends on how much
you owe, how much you pay,
and other factors. Many
clients get raises, promotions,
or better jobs during the
life of their DMP and can
increase their payments.
As your debt burden decreases,
payments to the remaining
creditors will be increased.
The most important thing
now is to take the first
step and come in for counseling.
Q. Where
can I get help to learn
more about money management?
SPRINGBOARDÃ,® provides educational
materials and publishes
newsletters offering tips
and good information about
making the most of your
money. We also provide in-person
classes in our branch network
and Internet resources.
Q. What
would happen if I were to
run into medical expenses
and my income is not enough
to pay for them?
We may be able to arrange
to add medical debts to
the plan. As with other
issues that arise, we ask
that our clients act responsibly
and we will do everything
we can to help.
Q. How
does SPRINGBOARD's relationship
with my creditors work?
Most of our funding comes
from voluntary contributions
from creditors who participate
in Debt Management Plans.
Since creditors have a financial
interest in getting paid,
most are willing to make
a voluntary contribution
to help fund our agency.
These voluntary contributions
are usually calculated as
a percentage of payments
you make through your DMP.
However, your accounts with
your creditors will always
be credited with one hundred
percent (100%) of the amount
you pay through us and we
will work with all your
creditors regardless of
whether they contribute
to our agency.
Q. The
small monthly administration
fee cannot possibly meet
SPRINGBOARD's expenses.
Where does SPRINGBOARDÃ,®
get the money to operate?
The small fee we charge
helps pay the cost of checks,
envelopes and postage, but
it takes real money to pay
the full expenses of SPRINGBOARDÃ,®.
The balance of our funding
comes from voluntary contributions
from creditors who participate
in DMPs. Since creditors
have a financial interest
in getting paid, most are
willing to make a contribution
to help fund our agency.
These contributions are
usually calculated as a
percentage of payments our
clients make through their
DMP. However, our clients'
accounts are always credited
with 100% of the amount
they pay through us, and
we work with all creditors
regardless of whether they
contribute to our agency.
Our DMPs serve the dual
role of helping you repay
your debts and helping creditors
collect the money owed them.
Q. What would happen if I were to stop depositing or
withdraw from the DMP before
my debts were paid in full?
Your financial future could
be in serious jeopardy.
Even if a client thinks
they have enough debts paid
and they can handle the
remaining creditors on their
own, it could be damaging.
Creditors who may have been
waiving interest and late
fees will start charging
again. In addition, we would
be unable to verify your
plan completion to lenders.
We always encourage our
clients to call your Support
Counselor and discuss the
consequences before making
such a decision. Sometimes
it's in the client's best
interest to leave the DMP;
however, in most cases,
it is a mistake to be avoided.
Q. Why
can't I just keep paying
off my creditors on my own?
If you keep paying just
the minimum to your creditors
at the current interest
rate, it will take you much
longer than if you paid
off your debt through SPRINGBOARDÃ,®
credit counseling. A $10,000
debt usually takes 32 years
and $24,500 to repay, if
you are making the monthly
minimum of 2.5% of the balance
at an average interest rate
of 18.5%. Because we may
be able to reduce your interest
rates, stop over the limit
fees, and provide other
beneficial services, it
will take a lot less time
to pay off your debt through
us. Chances are, most of
your past debt payments
have just gone to pay off
interest. You probably haven't
even touched the balance!
On average, SPRINGBOARDÃ,®
credit counseling clients
pay off their debts in 3
to 5 years, depending on
individual circumstances.
Q. How much will it cost me to be on the Debt Management
Plan?
There is typically a $50
initial fee for plan setup.
There is also a small monthly
administration fee to cover
the costs of handling accounts.
Our monthly administration
fee differs from state to
state but is minimal. For
example, for California
residents our fee is $20
or 6.5% of disbursements,
whichever is less. As a
nonprofit organization,
we depend on these small
contributions to meet our
operating costs. Your counselor
will explain all fees and
charges for the debt management
plan to you before you enroll
in our program.
Q. Can
I send in more money if
my cash flow improves?
Of course - you can always
increase your monthly payment.
The more you pay, the faster
your accounts will be paid
off. Let us know you want
to increase your payments
beforehand and we will take
care of the rest.
Q. Should
I pay my bills that are
due before I send you my
first payment?
We recommend you do - if
you miss due dates for accounts
in the meantime, you risk
penalty fees and negative
information being reported
to the credit bureau.
Q. What
about life after SPRINGBOARDÃ,®?
Congratulations! You are
now on the road to financial
freedom! Completing the
DMP makes you debt-free
and in control of your income.
You don't have to have a
high income to have a good
life. It's not how much
money you make, but how
well you make your money
work for you. |
