How to Become Debt Free with a Debt Management Plan in Connecticut

Find a Credit Counseling Agency

In Connecticut, all debt management companies, or “debt negotiators” are required to be licensed and bonded. However, bona fide non-profit organizations are exempt from the licensing requirements. Note that you can check to see if complaints have been filed against any agency you’re interested in working with through the Connecticut Attorney General and Better Business Bureau.

Even if the credit counseling organization you are considering is licensed, you should still verify that it is also an accredited non-profit credit counseling agency. It is important to deal with a non-profit credit counseling agency because most credit card companies will only deal directly with non-profit credit counseling organizations. In addition, reputable non-profit credit counseling agencies do not charge for your initial credit counseling session. Non-profit credit counseling organizations emphasize consumer education over program enrollment and their credit counselors are not paid on commission. The National Foundation for Credit Counseling (NFCC) and the Council On Accreditation (COA) certify that their member agencies have agreed to abide by these industry standards. 

In the State of Connecticut, Money Management International, CESI, and GreenPath are all licensed to provide debt management credit counseling services. To find other credit counseling agencies in your area that are trusted by Upsolve, please feel free to contact us.

What to Expect at Credit Counseling

Many credit counseling sessions occur over-the-phone. This is normal and does not mean that the credit counseling agency is “screening” you. Offering credit counseling sessions over-the-phone and online, allows credit counseling agencies to offer credit counseling on-demand and in some instances, 24 hours a day. 

If your initial credit counseling session is conducted over-the-phone:

• You’ll provide basic information from you regarding your personal finances and current financial situation;

• You’ll be conversing with an actually certified credit counselor and not a customer service representative or screener;

• If the session is automated, you will have the option of requesting a call from a certified credit counselor in-person at any point during the session;

• Depending on your situation, the session will last 30 to 45 minutes;

• The session will be confidential. Your creditors will not be notified of the credit counseling session or what was discussed;

• You will receive personalized recommendations at the end of the session.

If you do not wish to conduct your initial credit counseling session online or over-the-phone, you can make an appointment to meet with a certified credit counselor in-person during normal business hours.

Making the Decision & Getting Started

Just as impulse purchases are something most people usually regret, making an impulsive decision to start a long term Connecticut DMP can also be something you come to regret. Even if you are feeling confident about your ability to start and complete a Connecticut DMP, you should not make up your mind about starting a debt management program until you have asked yourself some honest questions. These questions include:

• Did you neglect to ask any questions? You should not be embarrassed or reluctant to ask questions about your DMP? Now is the time to ask any questions you may not have asked before.

• Are you convinced you can stick to your budget? If you feel your budget is too strict you should tell your credit counselor now before starting your DMP.

• Is a Connecticut DMP a good option for you? Having a long-term steady income is imperative to a successful DMP.  If you think your income may change in the near future, talk to your credit counselor about other debt relief options.

• Have all the set-up fees, monthly maintenance fees and costs been disclosed and explained to you? If not, ask for them in writing.

Put Together Your Connecticut Debt Management Plan

If you have thought it out and had all your lingering questions answered, you are now ready to put together your customized debt management plan. In order to create your personalized plan with your credit counselor, you will need to provide them with some very specific documents. These documents will allow them to construct a personal profile of your current financial situation that they can present to your creditors to negotiate the best terms possible for your Connecticut debt management plan. As a result, it is important that you be able to document any financial detail they will share with your creditors.

It is very important that the plan is as accurate and as feasible as possible. In order to ensure this is the case, your credit counselor will need some very important documents from you. Some of the documents you should locate and copy to provide to your credit counselor include:

• Your credit card bills detailing your current balance, minimum monthly payment, due dates, interest rates and late fees associated with your credit card accounts.

• Your credit card agreements detailing the terms and conditions of your credit card accounts.

• Your bank statement, or your credit union statement.

• Your most recent credit report.

• Your other monthly debts such as auto loans, payday loans, student loans, medical bills or personal loans.

• Your other financial documents requested by your credit counselor.

Begin Payments

As part of your Connecticut DMP, you will make all your plan payments to the non-profit credit counseling agency you are working with. When you set up your Connecticut DMP, you will likely begin making payments before all of your creditors have agreed to the comprehensive terms of the plan. This is normal and you should still make the required payments on time and in the full amount called for in your plan. Your non-profit credit counseling agency will distribute the payments to your creditors as they sign on.

In addition to being informed about when your payments are due and how much you must pay, your non-profit credit counseling agency should give you a monthly statement detailing the payments it has received, the payments it has disbursed to your creditors and the balance owed on your plan. It should also reflect any interest rate reductions or over-the-limit and late fees that may have been waived.

How to Stay Current with Your Connecticut Debt Management Plan

If you’ve made the commitment to complete a Connecticut debt management plan and have started making payments, the last thing you want to do is get behind on your plan. As a result, one of the things you can do now is to make sure the due date for your payments does not fall on the first or last day of the month when large bills like your rent or mortgage payments are likely due.

Another step you can take to ensure you stay current with your Connecticut DMP is to set aside funds for unexpected emergencies. Many NFCC certified credit counseling agencies offer debt management plans that add a savings component to your plan. If this option is not available through your credit counseling agency, set up your own savings by putting unbudgeted income aside for emergencies when it comes in.