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Frequently Asked Questions

Congratulations on taking the first step toward financial independence! We hope the following FAQs will provide answers to some of your questions regarding NFDM and its programs.

General

1. What is National Foundation for Debt Management?
2. Why should I trust NFDM to help me get out of debt?
3. Are there any tools on your site I can use to help me determine whether or not I need to enroll in a debt management program?
4. Why do I need to keep a budget?
5. What are some budgeting and planning tips I can use to help stay out of debt?
6. Why should I use credit with caution?
7. What is unsecured debt?
8. What is secured debt?
9. What is a credit card?
10. Can I ask a credit counselor a question via the Web?

Foundation Membership

1. Why should I become a member of the Foundation?
2. What kinds of financial education materials can I expect to receive as a member?

Educational Programs

1. How can I learn more about financial education seminars in my area?
2. My finances are under control right now, but I would like to learn more about money management and personal finance. Can you help me?

Debt Management Program

1. How do I know if I qualify for the debt management program?
2. How does the debt management program work? Is this a loan?
3. What types of debt can NFDM help me with?
4. What's the catch?
5. High interest auto loans, do you help?
6. Do you cover payday loans?
7. How much does your company charge?
8. Is there a fee that needs to be paid up front before I can get help?
9. Can you assist me, if am currently in a debt management program with another organization?
10. When are fees due?
11. How much can I expect my debt to be reduced?
12. Can I change my scheduled payment date?
13. Can I add more creditors to the program?
14. Can I send more than the minimum amount to my creditors if I am able to do so?
15. I recently relocated and changed my bank, what do I need to do?
16. Can I use the credit cards that I have implemented into the program?
17. It’s been over four weeks and my creditors are still calling me, what should I do?
18. Why am I still receiving statements from my creditors?
19. What do I do if I receive a statement that reflects late charges, over the limit fees and the same interest rate?
20. Will I receive a monthly activity statement of my accounts?
21. Where can I find information regarding my credit report?
22. Will credit counseling appear on my credit report?
23. When a creditor is paid off, what happens to the money that was being paid on that account?

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General

1. What is National Foundation for Debt Management?
National Foundation for Debt Management (NFDM) is a non-profit consumer education organization that provides information on personal finance and money management to the public.

Our goal is to help individuals and their families achieve financial security through sound financial planning. As part of that process, we offer Foundation members professional credit counseling, home ownership counseling, debt management services and a range of financial education programs and seminars.

2. Why should I trust NFDM to help me get out of debt?
Because our certified credit counselors have already helped thousands improve their financial situations. And we’re confident we can do the same for you.

3. Are there any tools on your site I can use to help me determine whether or not I need to enroll in the debt management program?
Yes. You might want to visit the Financial AnalysisTools section on the Web site to help you determine whether or not your situation warrants enrollment in a debt management program.

If, after that, you’re still not sure, give us a call at (800) 344-5153.

4. Why do I need to keep a budget?
Unless you’re tracking your money closely, chances are that it’s not going where it should. Consumers need to take control of their spending and realize that their financial situation can be overcome with proper budgeting. The goal of proper budgeting is to make sure that your monthly expenses do not exceed your monthly take-home income.

5. What are some budgeting and planning tips I can use to help stay out of debt?
Start by getting organized – make sure your checkbook is up-to date and balanced, that you have a system for tracking and paying your incoming bills, and that you and your spouse/partner are on the same page in terms of your spending priorities. Next, work to prepare a livable household budget, one that does not exceed your take-home pay. Remember to account for emergency expenses, such as car repairs and medical bills, in your budget. Take control of your credit cards (one rule of thumb is that if you can eat it, drink it or wear it, you shouldn’t charge it). Finally, work to establish a savings account. It’s never too early to start planning, and saving, for the future.

6. Why should I use credit with caution?
Borrowing for day-to-day wants and needs gets many people into financial trouble. Before using your credit cards, obtaining a payday loan or borrowing against your home’s equity, ask yourself a few simple questions: Do you really need to borrow the money? Can you afford to pay it back?

And remember, if you eat it, drink it or wear it, don’t charge it. Use cash instead.

7. What is unsecured debt?
Unsecured debt is not tied to a specific piece of property. The most common types of unsecured debts are credit cards and medical bills.

8. What is secured debt?
Secured debt is tied to a specific piece of property. The most common types of secured debts are homes and automobiles. A house or car is considered collateral that you are pledging to the lender to guarantee repayment of the money you’ve borrowed.

9. What is a credit card?
Simply put, a credit card is an unsecured line of credit issued by a financial institution to be used to purchase a variety of goods and services. The credit card is issued with a specified credit limit. Every time the card is used for a purchase or a cash advance, a loan is contracted between the consumer and the issuer, which essentially consists of repayment of that loan plus interest.

The following are some common credit card terms:

Interest – compounded on an average daily basis
Annual fees – levied once-a-year to the credit card holder for use of the card
Cash advance fees – levied immediately upon withdrawal of cash
Transaction fees – levied when a consumer uses their card, alters the due date or transfers funds
Late fees – levied when payment is not received by the due date; these can be as high as $35
Over-limit fees – levied when a consumer charges beyond their pre-set credit limit ($20-$40)

10. Can I ask a credit counselor a question via the Web?
You can ask questions by sending an email to questions@nfdm.org. Current program members may reach a program representative by sending an email to Supervisor@nfdm.org.

We’ll try to respond to all inquiries within 24 hours.


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Foundation Membership

1. Why should I become a member of the Foundation?
As a member of National Foundation for Debt Management you gain instant access to NFDM’s financial education programs. In addition, you may choose to work one-on-one with our experts, to help you gain a better understanding of issues related to money management and personal finance.

The Foundation also conducts a variety of educational seminars and provides access to a wealth of educational materials that will improve your understanding of financial matters. Materials are written in layman’s terms, defining the basics of money management including: budgeting, banking, saving, investing, credit cards, credit reports, identity theft, buying vs. leasing, home buying vs. renting, insurance, student loans, unpaid debt, and planning for the future.


2. What kinds of financial education materials can I expect to receive as a member?
Members of the Foundation gain instant access to NFDM’s online materials. Sample educational topics include: budgeting, banking, saving, investing, credit cards, credit reports, identity theft, buying vs. leasing, home buying vs. renting, insurance, student loans, unpaid debt and planning for a secure and prosperous future.

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Educational Programs

1. How can I learn more about financial education seminars in my area?
You can find a list of our scheduled financial education seminars on the calendar page of this Web site. 

2. My finances are under control right now, but I would like to learn more about money management and personal finance. Can you help me?
Yes we can. As a Foundation member, you’ll have access to NFDM’s educational materials, including online discussion forums and multimedia presentations, as well as print materials on subjects ranging from consumer credit to creating (and living within) a realistic budget.

To learn more about becoming a member of the Foundation, click here.


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Debt Management Program

1. How do I know if I qualify for the debt management program?
National Foundation for Debt Management does not have any minimum requirements to qualify for the debt management program. All consumers are considered, regardless of financial status, after a one-on-one consultation.

2. How does the debt management program work? Is this a loan?
It is not a loan. It is simply a means of restructuring your debt based on guidelines provided to us by your creditors. However, for most clients we are able to consolidate your bills into one monthly payment and reduce the interest rates on your credit cards and other debts.

3. What types of debt can NFDM help me with?
Credit cards, department store cards, collection accounts, charge-offs, student loans (for convenience only) and any other unsecured debts may be consolidated with our debt management program. It is important to note if you have not consolidated your student loans yet, we may be able to help you lower your interest rate and monthly payments.

4. What's the catch?
There is no catch. The thousands of people who have experienced success with NFDM programs prove our claim that education, commitment and dedication are the keys to a sound financial future.

5. I have high interest auto loans, do you help with those?
A debt management plan (DMP) is only applicable to unsecured debt, such as credit card debt, medical bills or other debt not secured by collateral such as an automobile. We can not place auto loans into a DMP, since auto loans are secured debts. Instead, it may be helpful for you to contact the company financing the loan to see if they are able to reduce your interest rate.

6. Do you cover payday loans?
Some payday loans are not eligible for DMP assistance.

7. How much does your company charge?
NFDM is required to comply with state laws that limit monthly administrative fees. These fees can range from zero to $69 per month. When we perform your debt analysis, we will be able to determine your monthly administrative fee based on the fee guidelines of your state.

8. Is there a fee that needs to be paid up front before I can get help?
There is no fee to analyze your situation or to determine which options will benefit you most. In some cases, an upfront payment to cover our costs to set up your account will be collected. Any upfront fee we collect will be determined in accordance with applicable state laws.

9. Can you assist me, if am currently in a debt management program with another organization?
We do not encourage switching from your existing debt management plan to NFDM, unless there is a significant benefit to be gained from such a change. Our goal is to direct you to the help that you need most. If you are unsure about the quality of the assistance you are currently receiving, you may wish to verify that the debt management company your are with is licensed in your state and that they are certified by a credentializing organization, such as The National Association of Certified Credit Counselors (NACCC).

10. When are fees due?
Any monthly administrative fee for your program will be due with the payment you send us to disburse to your creditors. That way, you only make one monthly payment.

11. How much can I expect my debt to be reduced?
The amount of money you are able to save through the DMP depends on your current debt obligation, your current interest rates, and the specific creditors in your plan. It is important for you to understand your own debt situation and to set your own goals. National Foundation for Debt Management can help you to gain a clear understanding of your finances and to get a firm handle on the challenges to your financial wellness. Feel free to contact one of our certified credit counselors to see which of our programs and resources may be best for your situation.

12. Can I change my scheduled payment date?
We recommend that you not change your payment date because it may cause problems with creditors. If it is absolutely necessary, please give us at least one week’s notice of the original payment date.

13. Can I add more creditors to the program?
Yes, please contact our customer service department to discuss any accounts you wish to add to the program.

14. Can I send more than the minimum amount to my creditors if I am able to do so?
Yes, if you are able to send more money please contact our customer service department to discuss your options.

15. I recently relocated and changed my bank, what do I need to do?
Please contact us and let us know of the new information. We will immediately update our systems accordingly.

16. Can I use the credit cards that I have implemented into the program?
While you are enrolled in the debt management program, the credit card accounts that are included in your payment plan may be closed or frozen. Incurring more charges on your accounts will only cause your balances to go up and your payments to increase—preventing you from receiving benefits from your creditors such as the reduction or elimination of interest or lower payments.

17. It’s been over four weeks and my creditors are still calling me, what should I do?
Please let them know that you enrolled in NFDM’s debt management program, and give them our toll free number so that they can contact us directly. If they are unable to call us, please get the name of the creditor and let us know. We will be more than happy to call them on your behalf.

18. Why am I still receiving statements from my creditors?
Your creditors will continue to send you monthly statements showing the payments disbursed from our agency. It is important to keep these statements for your own personal records.

19. What do I do if I receive a statement that reflects late charges, over the limit fees and the same interest rate?
It may take between one and three billing cycles before your creditors stop charging you late or over-the-limit fees or lower your interest rates as a result of your enrollment in a debt management program. However, we encourage you to contact our customer service department with any questions you may have about your statements.

20. Will I receive a regular activity statement of my accounts?
Activity statements of all accounts are available to members online. Printed statements can also be sent by request through your professional account manager.

21. Where can I find information regarding my credit report?
It is a good idea to check your credit report periodically to ensure its accuracy. You have the right to correct any mistakes and even provide explanations for late or missing payments for valid reasons. If there is a mistake on your report, write a letter to the bureau describing the error. They should respond within 30 days. There are three credit reporting agencies:

Experian 1-888-397-3742 or www.experian.com
Trans Union 1-800-916-8800 or www.tuc.com
Equifax 1-800-685-1111 or www.equifax.com

22. Will credit counseling appear on my credit report?
National Foundation for Debt Management does not report to credit bureaus if you are past due. Some creditors may notify the credit bureaus of your account being current while you make payments through the Foundation. If you were current with your creditors upon enrollment, some creditors may report that you have enrolled in a credit counseling or debt management program. However, most creditors look favorably upon individuals who are making an effort to pay back their debt and do not report that information negatively to the credit bureaus.

23. When a creditor is paid off, what happens to the money that was being paid on that account?
In order to get out of debt as quickly as possible, we suggest you keep your monthly payment the same and apply the extra money to another creditor. Our trained, professional account managers will determine which account should receive the extra money, unless you notify us of your own preference in the matter.

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