Financial Education

A Debt Management Program is a payment plan between you, CCCS of Chattanooga, and your unsecured creditors.  In this plan, creditors agree to offer special concessions to help you get out of debt.  These concessions may include reducing your interest rates and stopping late and over-limit fees.  This plan can reduce the months or years of repayment. 

Debt settlement programs are typically offered by for-profit companies and some law firms to help consumers who are unable to repay their unsecured debts as originally agreed or through other creditor-approved repayment options, such as hardship programs or debt management plans. In a debt settlement program, you make monthly payments to the settlement provider instead of directly to your creditors. Those funds are held in a dedicated account until enough money has accumulated for the provider to attempt to negotiate a settlement with one or more of your creditors for less than the full amount owed. During this process, your creditors generally are not receiving payments. As a result, collection efforts continue or increase, and creditors may assess additional interest and fees, report missed payments to the credit bureaus, file lawsuits, or pursue other legal remedies. Not all creditors agree to settle debts, and there is no guarantee that a settlement offer will be accepted.

When you are initially enrolled into the program, the creditors can close the accounts. This can cause a slight decline. However, as you make consistent on time Debt Management Plan payments, each creditor on the plan will update the credit report each month. This can cause a positive effect over the course of the program as you pay down the debt.

We assist our clients with reducing the interest rates to help make their payments more affordable and to pay off the debt in a more timely manner. However, we do not reduce the overall balance as this would be a considered a debt settlement.

You should/will continue receiving monthly statements from your creditors. If you are not receiving statements from your creditors, you should contact them to ensure they have your most recent contact information. These statements provide you with valuable information regarding your account with them. Key information located on your statement that should be monitored monthly:

• Balance

• Interest Rate

• Payment activity

• Interest charges

• Additional activity such as credits or other balance adjustments

It’s important to monitor your monthly statements to ensure that you’re being charged the correct interest rate, your balance is decreasing with payment activity and that there is no unusual activity or additional fees being applied to your account. If you have any questions about your statement or notice incorrect information, please contact our Client Support Department for additional assistance. The statement will provide us with important information so please have it available at the time of your call. If necessary, we will contact your creditor to resolve the issue. CCCS of Chattanooga will also send you a statement on a monthly basis. Our statements provide estimated account balances, anticipated interest rates of each account as well as payment activity for your Debt Management Plan. In addition to reviewing your creditor statements for accuracy, we request that you compare our statement to that of your creditor and notify us of any discrepancies. Our staff members work in partnership with you to ensure your account information is accurate and that your Debt Management Plan is successful.