Frequently Asked Questions
Here are some Frequently Asked Questions about Debt Reduction Services and the services we provide. Please call 1-877-688-3328 (OUT-DEBT) for more information or if you have any questions.
Who is Debt Reduction Services?
Debt Reduction Services is a Non Profit Credit Counseling and Debt Management Solutions agency established in 1996 to provide financial counseling and education, and in those instances where applicable, Debt Reduction Services also offers Bankruptcy Counseling as defined by the 2005 Bankruptcy Abuse and Consumer Protection Act.
Our Credit Counselors are certified by The Institute for Financial Literacy. Debt Reduction Services is an ISO 9001:2000 certified, as well as member of the Better Business Bureau (BBB), and the American Association of Debt Management Organizations.
What is Debt Consolidation?
Debt Consolidation or a Debt Management Program (DMP) is a proven program for consumers who can no longer continue to meet their financial obligations such as credit card debt, student loans, and other personal or unsecured debt, due to any number of different circumstances.
Debt Reduction Services provides Consumer Credit Counseling and can work directly with your creditors to create a repayment plan (Debt Consolidation) that often includes a lower monthly payment, stopped or reduced interest and the elimination of late or over limit fees.
This way, more of your payment goes to reducing your debt, thus getting you out of debt faster than if you were to continue making just the minimum monthly payments. You make one payment to Debt Reduction Services each month, and in turn, we disburse the payments to all of your creditors.
What Types of Debt Can Debt Reduction Services Work With?
Generally, Debt Reduction Services can help you consolidate unsecured debt such as the following: Credit Card Debt,Department Store Credit Cards, Oil/Gas Credit Cards, Personal Loans (unsecured), Overdue Rent, Autos (Repossessions Only), Finance Company Loans (unsecured), Student Loans, Old Utility Bills, Medical/Hospital Bills, Payday/Check Cashing Loans, IRS Taxes, State Taxes, Overdue Child Support and many other Unsecured Debts.
What Does Debt Consolidation Cost with DRS Cost?
Unlike many other Credit Counseling agencies, there is never a charge for a consultation with our Certified Credit Counselors. If it is determined that you would benefit by participating in a debt consolidation program the fees will vary based on specific State regulations and the number of creditors that are included in the consolidation plan.
Clients typically pay a nominal set-up cost to cover the expense of the creating the account. There is also a monthly service charge to cover recurring expenses. To find out the specific cost of participating in our debt consolidation program, you may contact a certified credit counselor for a free consultation.
Why do Creditors Work with DRS and not me?
Debt Reduction Services is an accredited Credit Counseling and Debt Management Solutions Service trained in budgeting and financial counseling. Creditors believe that clients are more likely to repay their debt while participating in a Debt Consolidation program.
Therefore, they are often willing to negotiate more favorable terms for debt consolidation and repayment in order to avoid more serious debt problems, which may result in clients falling further behind in payments or defaulting on their credit card, student loan or other personal loan balances.
How Long Does Debt Consolidation Take?
The time frame for eliminating debt depends on each individual’s circumstance and how much total debt you have. Most clients pay off their debt within 3 – 5 years on our debt consolidation program.
You will know approximately how long it will take you to get out of debt based on the financial information that you supply to one of our Certified Credit Counselors during your consultation with Debt Reduction Services.
How do I Know my Accounts are Being Paid?
You will continue to receive your regular creditor statements, showing the payments that have been applied. Also, we will send you a quarterly recap of all payments received and disbursed by Debt Reduction Services.
Can I Continue to use my Credit Cards for Charging?
The objective of the Debt Reduction Services debt consolidation plan is to get you out of debt as quickly as possible.
The creditors you put on the consolidation plan will inactivate your accounts with you while at the same time granting you program benefits that allow you to take advantage of reduced interest rates and an elimination of late or over limit fees as long as the accounts are kept current. Credit card account will be closed to further charging by the creditors.
Do I Need to Own a Home to Begin Debt Consolidation?
No, because the Debt Reduction Services consolidation program is not a loan, therefore you do not need collateral to begin.
How Does Debt Consolidation Affect my Credit and Credit Report?
According to Fair Isaac, the company that invented the FICO credit risk score that lenders use, what is not factored is “Whether or not you are participating in Credit Counseling of any kind” (Source www.myfico.com)
While in a Debt Consolidation plan, consistent on time monthly payments and the reduction of your overall debt continues to be the most important factor in obtaining a better credit score on your credit report.
Remember, no one can promise a quick fix or instant credit repair when it comes to your credit report and score. Time, patience and consistency in payments will give your the most benefit.
Is Debt Consolidation Like Filing for Bankruptcy?
No. Our programs have helped thousands of people avoid bankruptcy. Unlike bankruptcy, the program will help you pay off your debt, dollar for dollar, and get your finances under control.
Bankruptcy should be your last stop, not your first. It can stay on your credit report for up to ten years, and could make it more difficult to obtain credit in the future, whereas debt consolidation can help find financial solutions to your old problems and eventually eliminate your debt.
If you have any further questions be sure to call us at 1-877-688-3328 (OUT-DEBT) and speak to a Certified Credit Counselor.
