Debt Management Plan Questions and Answers

By coming to Momentive™ and seeking help with your debts, you have taken the most important step toward getting out of debt. Many people consider family finances a very personal and private part of their lives. It's hard to face the fact that you are in financial difficulty and need help.

Upon receiving financial counseling and making the initial deposit, you are an active participant in the program. Your account representative and counselor will begin working with you and your creditors to help you get out of debt. Momentive™ will be available to help with any problems or questions you or your creditors may have while you are on the program. We will do whatever we can to ensure that you successfully complete the program.

The following will answer many of the questions you might have about the Debt Management Plan. Keep it handy for future reference. Remember that communication is the key to getting and staying out of debt. Don't hesitate to call when you have questions and concerns. Be sure to let us know when you have changes of address, employment, or anything that might affect your program. We're here to help!

What can I do to help my Debt Management Plan along?

A. Here are some DO'S:

• Keep in touch and let us know immediately if any problems arise.

• Inform us immediately of any changes in your name, address, marital status, employment or anything else that would affect your program.

• Bring or mail your deposits on time. No cash or personal checks are accepted. Make your deposit by electronic deposit, money orders, or cashier's check.

• Check your statements from creditors to ensure that Momentive™ payments are being properly credited. Also, keep us informed if any accounts are turned over to attorneys or collection agencies. Turn in your statements or copies of your statements to Momentive™ every month.

• Contact your creditors to see if they will change the due dates on your accounts to end of the month.

B. Here are some DON'TS:

• Don't miss sending your deposits. If you do, your creditors are likely to resume their normal collection procedure and resume interest and late fee charges.

• Don't make any payments directly to your creditors. Send all deposits to Momentive™, even if they are late or if there are extra payments you might be able to make.

• Don't use credit cards or apply for any additional credit without the prior consent of your counselor. If you do, it will place your Debt Management Plan in jeopardy.

When will Momentive™ contact my creditors?

• After you have agreed to participate in the program and have made the initial deposit, Momentive™ will mail proposals to each of your creditors.

• The proposal requests the creditor's support cooperation and specifies the proposed repayment amount and the date by which the creditors can expect payment.

What if a creditor refuses to accept the proposed plan?

• If a creditor does not accept the proposed payment arrangement, either your counselor or account representative will contact you to work out other arrangements.

Will creditors still call me? Will I still get bills from my creditors?

• Creditors may still call you even though you are paying your bills though Momentive™. To avoid any misunderstanding, please do not negotiate with those creditors on your Debt Management Plan. Ask them to contact your account representative. Notify your account representative immediately about any creditors who indicate that they will not work with Momentive™.

• In most cases you will continue to receive statements from your creditors which should reflect your payments though Momentive™. If you do not see your Momentive™ payment posted, notify your account representative.

Will my creditors interest and late fees stop now that I am on the Debt Management Plan?

• Some creditors do stop (or lower) finance charges; however, it is important for you to know that not all creditors stop interest or drop late fees. Your counselor can advise you of these creditors.

Can I pay my creditors directly while I am on the program?

• Generally, no. Once your program is set up, your creditors will expect payments though Momentive™. Only under special circumstances and after consultation with your account representative should a creditor be paid directly.

When will you pay my creditors?

• There are six possible deposits due dates. You will choose the date that is best for you during the initial counseling session. These dates are the 1st, 6th, 11th, 16th, 21st or 26th of the month.

• Your creditors will be paid on the fourth day after your selected deposit due date. Creditors will be paid once per month on the 5th, 10th, 15th, 20th, 25th or 30th.

Why won't you make payments to all of my creditors?

• We work out a repayment plan with those creditors who are willing to work with us. Some creditors are unwilling to work with Momentive™. For example, if you have secured loans, generally those creditors are unwilling to work with Momentive™ because they may "repossess" their merchandise if you don't make the payments.

Can I put delinquent federal tax debts on the program?

• The internal Revenue Service (IRS) will allow you to put personal tax debts up to $10,000 on the program. The IRS charges a one-time fee for the initial arrangement on the program. As with all other creditors, they must agree to work with you and to accept a proposed amount.

What if I can't make a full deposit to Momentive™?

• If you can't make a full deposit to Momentive™, here's what happens. Even if Momentive™ sends a partial payment to your creditors, your creditors are empowered to void any and all existing agreements and to resume normal collection activity and any time a payment is missed. Additionally, creditors may begin charging late fees, interest and other fees until the missing payment is made up. Any missing payments should be made up as soon as possible.

Can I increase my monthly deposit to Momentive™?

• Definitely. Anytime you have the good fortune of having extra money for your creditors (one time or every month), you should do so. Remember, your objective and ours is to get you out of debt as quickly as possible.

What happens if I have extra money and I want to pay off my account early?

• When circumstances permit early payment, call your account representative team. We will contact your creditors for the final amounts. Please make these final payments though Momentive™. Your final statement may show a small amount due for finance charges. This frequently happens because of differences in billing cycles. Your account representative will tell you the amount to be included in your last deposit.

What will happen if I miss a deposit or two?

• You will need to make up the missing deposit as soon as possible. Making consistent and timely deposits is the key to making your Debt Management Plan work. When you start the program, you are making a commitment to your creditors to get out of debt. They will be expecting you to live up to that commitment. If you miss two consecutive deposits or have a pattern of missed deposits, you are likely to be dropped from the program.

Why did I have to cut up or return all my credit cards, even the ones with no balance?

• One of the base rules of getting out of debt is not to incur any additional debt. When you turn in your credit cards, you are assuring your creditors that you will not be tempted to incur additional debt.

Why did I have to give up a credit card on which I was making full payments?

• Most of your creditors understand that you are having financial difficulties and may be giving you a break while you are on the Debt Management Plan by adjusting payments, and perhaps dropping interest charges and late fees. They want to be assured that if they are making concessions, your other creditors are also cooperating. They simply want to be treated fairly and equitably. It is unfair for one creditor to get a full payment while another is accepting payments.

What happens if I withdraw from the Debt Management Plan?

• Your Momentive™ program is a voluntary program involving you, your creditors and Momentive™. If you drop out of the program, you lose all of the advantages the program can provide, such as adjusted monthly payments, lower interest charges, avoiding bankruptcy, learning to live with in your means, avoiding unpleasant collection calls and the opportunity to re-establish credit with several creditors who are willing to work with clients when you have completed the Debt Management Plan.

How will working with Momentive™ affect my credit rating?

• It is important for you to know that any information on your credit report is put there by your creditors. Consumer Credit Counseling Service® of Central Indiana does not report any information to Credit Bureaus. Many creditors will begin to report an account as current after they have received the first proposed payment with Momentive™. This does not mean the delinquency or negative information in the months prior to entering the Debt Management Plan will be changed. Some accounts will continue to show delinquencies. Some that were showing current might now show delinquent. The information a creditor reports to the credit bureau is determined by their company policy. You might choose to contact your creditors to verify their credit reporting policies.

Will my deposit decrease as I pay off each creditor?

• No. The additional money will be applied to another creditor. The goal is to get out of debt and creditors expect your best effort.

If I need help adjusting my budget to living within my budget, will Momentive™ help me?

• Yes, Call your counselor. He or she will be happy to set up an appointment to meet with you.

How is Momentive™ funded if my voluntary fee covers only some of the costs of mailing and processing?

• Most of our funding comes from voluntary contributions from creditors who participate in Debt Management Plan ("DMP"). 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 payment you make through DMP-up to fifteen percent (15%) of each payment received. 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.

Can I be taken to court by my creditors?

• Most creditors would prefer to receive payments though Momentive™ rather than to resort to legal action. Many will stop legal action or hold judgments in abeyance if they are receiving timely payments though Momentive™. However, if you should receive a summons while on the Debt Management Plan, contact your counselor or account representative immediately. Be sure to follow the instructions of the court or your attorney. You may wish to provide with documentation of your participation on the Debt Management Plan.

How long will it take me to complete the Debt Management Plan and get out of debt?

• Generally about four to five years, but there is no simple answer to this question because each clients situation is different A very rough estimate to determine the number of months is to divide the amount of debt on the program by your monthly Momentive™ deposit. But keep in mind that such factors as creditors who continue to impose finance charges and extra funds you may have sent to Momentive™ may contribute to varying the amount of time it will take to pay off all your debts.

What happens when I complete the Debt Management Plan?

• Our staff will verify balances and let you know when you are just about to complete the program. At that time you may meet with your counselor to review your program, review your current finances and revise your budget, and obtain your credit reports. With the cooperation of several creditors, it may be possible for you to begin to rebuild your credit.

Where can I get more information about money management?

• We offer monthly seminars on money management, plus Education Programs on a variety of financial topics throughout the year.

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