FAQS on Reasons for Debt
What is CESI?
is a non-profit organization committed to empowering and inspiring consumers nationwide in becoming debt free. We equip consumers with personal financial tools and educational programs that provide solutions for their financial situations.
Our counselors are certified through either The National Institute for Financial Education (NIFE) or Association for Financial Counseling Planning and Education (AFCPE).
Is CESI a Legitimate Company?
Yes, CESI is a non-profit agency and we are listed with the Raleigh, NC BBB. They can be reached at 800-951-3569.
What is charge-off debt?
Charge-off debt is debt that has been labeled as ‘uncollectible’ by the original creditor. A debt is usually classified as a charge-off after it is 6 months overdue. However, this does not mean that creditors cannot still make a claim on such debts because the debt still remains valid. It is also important to know that your credit report can show a charge-off for 7 years from the date first reported. Charge-off is sometimes also referred to as write-off.
What is delinquent debt?
Delinquent Debt is a debt that is more than 30 days past due. Within this 30 to 180 days overdue period, creditors often resort to various collection agencies to recoup the money owed to them before the debt is finally charged-off.
How does the statute of limitations apply to a debt?
With collectors going after people for debts that have long since been paid off or are not even theirs, it is important to know about the ‘statute of limitations’ on debts as this could help with dealing with erroneous or aggressive collection attempts.
A statute of limitations gives creditors a definite time period in which they can sue the defaulter over a debt. This varies from state to state and depends on the type of debt but is usually between 3 to 6 years. States have different rules that apply for verbal or written contracts, closed-end contracts such as instalment loans and open-ended one such as credit card accounts.
What is a default APR?
When you fail to make the minimum payment on your credit card or exceed your credit limit, a default APR (Annual Percentage Rate) can be used in some cases. This default APR is always much higher than the other APRs of your account. The rate is determined by the frequency and quantity of your default payments and other indications of risky account use. While federal and state laws can limit the maximum default APR that you can be charged by a credit card company, it is still higher and more difficult to pay back than normal rates.
How does the rule of ‘universal default’ apply to my late credit card payments?
There is a provision, normally buried in the fine print of your credit card agreement that says if you are more than 30 days late on any payment, the interest rate on your credit card could shoot up and your credit score may be damaged. More than a third of credit card companies today say they regularly act on this clause due to the increase in default payments. But many consumers still remain unaware of its existence and the repercussions on one’s debt. If you are even a day late on any payment to any creditor, under this clause, you might be subject to a default rate as high as 29.99 percent on your other credit cards as well.
What is a DMP?
A DMP consolidates all your unsecured debts such as credit card debts into a single monthly installment that you make to CESI. We then pay your creditors for you. A Debt Management Plan (DMP) can help reduce unsecured debts such as credit cards, personal loans, lines of credit, and store cards.
What is the process to enroll in a DMP?
Speak to our credit counselors either online or call our toll free number. Our counselors will counsel all the necessary financial information to determine if a DMP is a fit for you. We then use the guidelines provided by creditors concerning suitable monthly payments and come up with an estimate of your monthly payment. This is based on your debt amount and the creditors you owe. As you start sending your monthly installments to us, we will disburse this amount to your various creditors respectively.
What are the benefits of a Debt Management Plan?
Our Debt Management Plan helps you in consolidating your debt into a single monthly installment, creating a spending plan, and regaining control of your finances. We also work with creditors who may provide benefits such as lower interest rates and reducing or removing late fees
How long will it take to complete a DMP?
A DMP takes approximately 4-5 years to complete. This is based on the minimum required payments. However, the length of the program depends on the total amount of your debt, your specific creditors and whether you are able to pay more than the minimum amount required as you become more financially stable.
How will enrolling in a DMP affect my credit or credit score?
When you sign up for a DMP, some creditors may notify the credit bureaus placing a notation on your report indicating your enrollment in a DMP. The notation is normally removed when you complete or terminate the plan. We suggest that you review your credit report, upon completion/termination of the DMP, to ensure that all information is up to date and accurate. Some creditors might report an account as delinquent until all balances are paid off and this may have a negative impact on your credit.
How can I reach you once I’m enrolled on the debt management program?
You can access and make changes to your account by calling our Client Service Department @888-419-2374 or by accessing your account online at www.mycesi.org Client Service Representatives are available to assist you Monday through Friday 9am to 9pm and Saturday’s 9am to 9pm Eastern Standard Time.
