Freedom Through Financial Education
Many people have questions about credit counseling and debt management. At Cornerstone Financial Education, we understand that selecting an organization to work with is a big decision. We are more than happy to answer any questions you might have.

Debt Services FAQs

  1. How does a debt management program (DMP) work?
  2. Is your debt management program expensive?
  3. Will the debt management program hurt my credit score?
  4. What is the difference between Debt Management and Debt Settlement/Negotiation/Reduction?
  5. Why should I enter into a DMP and not just file for bankruptcy?
  6. Why should I choose Cornerstone Financial Education for my DMP?

If you have a specific question or want more information, please contact us at 1-800-336-1245.

  1. How does a debt management program (DMP) work?
    A debt management program is a program designed to help you get out of debt in 5 years or less. This is accomplished by a combination of lowering the interest rates, closing the accounts, consolidating all the debts into one lower and fixed payment, and rolling over the monthly payments of paid off creditors to unpaid creditors.
  2. Is your debt management program expensive?
    No. Cornerstone Financial Education does not charge any upfront fees, enrollment fees, counseling fees or early termination fees.
    Once on the program, Cornerstone charges a low monthly service fee for managing your DMP account. The service fee can also be waived in full or in part based on your particular financial situation. Cornerstone is here to help and does not want to turn anyone down that needs help and is serious about becoming debt free.
  3. Will the debt management program hurt my credit score?
    Entering into a debt management program requires that we close your accounts. Consequently, closing down open lines of credits will lower your credit score by a small amount. However, your credit score should start to increase once you start making payments on the program as your debt will begin to lower and your payment history improves. Within a year, your credit score should start to improve.
  4. What is the difference between Debt Management and Debt Settlement/Negotiation/Reduction?

    5. Debt settlement/negotiation/reduction only pays a portion of your debt and not the entire debt by withholding payment to your creditors and negotiating with a creditor in a highly confrontational manner.

    Debt management pays the entire debt in full with the cooperation of your creditors to help make your payments more affordable and consequently saving you thousands in interest.

    Although the promises of debt settlement may seem attractive, the savings are usually not nearly as impressive as advertised. Further, the process can take several years, the damage to your credit score is devastating, you can be sued by a creditor while you are negotiating the settlement, the "forgiven" debt is subject to federal income tax, and debt settlement companies are notorious for ripping off consumers.

    If you are still considering debt settlement, I urge you to read the article on our blog, Considering Debt Settlement?, and check out the debt settlement company your considering doing business with at the Better Business Bureau (BBB). Be sure that you only consider a company that is accredited by the BBB.

  5. Why should I enter into a DMP and not just file for bankruptcy?

    6. This is not a simple question to answer because it depends on your financial situation and the amount of your debt. The first thing to know is that a bankruptcy is not an automatic Chapter 7 bankruptcy (liquidation of your debts). In 2008, 38.4% of all consumer bankruptcy filings where a Chapter 13 repayment plan very much like a DMP offered by Cornerstone Financial Education.

    The main difference between a DMP and a Chapter 13 bankruptcy is that a Chapter 13 bankruptcy is a legal proceeding and a court ordered repayment plan whereas if you fail to make your payments, you will need to hire an attorney again and go back to court.

    A DMP plan by Cornerstone keeps your options open. If you find that making payments to your creditors is impossible under a DMP plan, bankruptcy is not only an option, but possibly the best course of action to take.

  6. Why should I choose Cornerstone Financial Education for my DMP?

    7. Because Cornerstone wants you to succeed and we will provide you with all the knowledge and resources to reach your financial goals.

    Our help does not end with debt management. Cornerstone provides workshops, books, counseling and compassion whether you need to establish credit, pay down debt, buy a new home, or even save your existing home from foreclosure.

    Cornerstone is also a Better Business Bureau Accredited Member with an A rating.

    Simply put, our clients love us.

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