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The Advantage Advisor

Advantage Advisor

Volume 2, Issue 2, 2007

Advantage News

Columbia Gas of Pennsylvania has generously funded a fuel program to help our clients pay for the high cost of fuel bills this winter. To qualify, you must be a Columbia Gas of Pennsylvania customer, have an active account and a current budget payment arrangement.

Additionally, your household income must be between 150 and 250 percent of Federal Poverty Guidelines. A single person household can earn up to $24,500 per year and a family of four can earn up to $50,000. If you qualify for this free program, ACCS will send either $25 or $50, depending on your budget payment plan, directly to Columbia Gas of Pennsylvania over a three month period for a total of up to $150. Funds will be distributed on a first come, first served basis. If you think you may qualify, please call us at 1-888-511-2227.

Tips for paying off creditors on your DMP

Are you in a financial position to pay off one or more of your creditors listed on your debt management program?

Our dedicated customer service staff can help. Your original agreement indicates that all debts will be paid through the agency. The creditors are expecting those payments to be submitted by ACCS.

Paying off a creditor (or creditors) through the agency provides you the following benefits:

Complete record keeping of all payments disbursed

A completion letter that you can share with future credit grantors
Convenience of making one payment (Acceptable forms of payment include money orders, cashiers checks or withdrawal from your checking account if you are on our ACH payment plan)
A letter of reference (upon request)

One of our customer service representatives will contact each of your creditors and obtain the payoff amount. Please note: The balances listed on your creditor statements may not be your actual payoff amounts. Balances reflected on your ACCS statement are only estimates. Once the payoff figures are obtained, a letter will be sent to you confirming the total amount due as well as which creditors will be included in the payoff.

No payoff information can be sent to third parties such as credit unions or mortgage lenders without a signed “Release of Information” form which can be obtained by contacting ACCS.

For more information, please contact our customer service department at 1-888-599-2227.

Buying a house

Your hands begin to sweat, you feel weak in the knees and you suddenly feel like you have to sit down. No, you are not experiencing some sort of medical emergency.

You have decided to buy a house.

t is a process that can make even the most confident person feel intimidated. So, what can you do to feel “normal” again?

Like any other major purchase, do your homework. Sure, we would all like to live in a multi-million dollar home, but is that realistic? The goal is to buy a home without ending up house poor.

One of the main things that you will need to do is to save money for the down payment. Typically mortgage lenders want to see that you can put at least 5% of the purchase price as a down payment. It is possible to purchase a home without putting any money down, but that will typically increase the amount of your monthly mortgage payment.

Mortgage lenders also need to be able to verify your income and whether it is steady or not. For a mortgage lender to feel comfortable in processing your loan application, it is preferable that you have been at your current job for at least two years. They also will want to verify any other assets you may have, including savings.

And what is one of the main elements to the home buying process?

The review of your credit reports and credit scores. The mortgage lender is going to review all three of your credit reports and scores not just one. The standard practice is that the mortgage lender will use the middle score of your three credit scores. Not to worry, you have been doing the right things when it comes to credit, so you know your credit score is solid.

Another important aspect of the home buying process is working with a real estate agent. The prevailing attitude is that both the buyer (you) and the seller each have their own agent. It is extremely important that you feel comfortable with your real estate agent. Ask questions of your agent. Better yet, ask friends and family for recommendations. This person should be able to guide you through each step of the home buying process. If the agent knows what they are doing, this should be a positive experience for you. And just think, no more renting.

If you are a first-time home buyer, talk to your mortgage lender. There are a variety of programs available to aid first-time home buyers in the purchase process.

Tips for tax season

Are you getting a tax refund or do you owe personal income tax?

ACCS offers the following tips for clients who are receiving a refund:

Pay off high-interest debt. If you plan to pay off debt with your refund, pay off debts that have the highest interest rates first. If you would like to pay off one or more of your credit cards or make an extra payment on your DMP, contact the Client Service Department to make payoff arrangements. Keep in mind, payments to creditors must be made through ACCS.
Open an emergency savings account. Many people live from paycheck to paycheck and have to borrow money if a crisis occurs. Having an emergency fund allows you to use cash for unplanned expenses.
Open an IRA. If you qualify, open a Roth IRA. Even though you don’t get to deduct the contribution from your taxes, the Roth IRA provides a tax-free way to save for retirement.
Save for college. Investing your refund for your children’s college education will save you money in the long term.
Make an extra mortgage or car payment. Making an extra payment (or two) will save you money in the long term. For example, making one extra mortgage payment each year on a 30-year, $100,000 loan at 6% interest, would cut nearly six years from the loan and save you $40,000. Making one extra car payment each year on a 6-year, $23,000 loan at 9% interest, would cut eight months of payments from the loan and save you $3,320.

ACCS offers these money management tips for clients who may have taxes due at filing:

Decide how to pay. Research your options. Some options include a bank loan or an IRS installment plan. You will pay interest on a bank loan and a processing fee and interest on an IRS installment plan. You can also request a six-month extension of time from the IRS in which to pay. Keep in mind, you must still file your tax return by the normal April due date. The extension will be granted only if payment of your taxes will produce “undue hardship” on you or your family, which you’ll have to prove to the IRS’ satisfaction. You will also have to provide statements of income, assets, liabilities and expenses for three months preceding the filing due date.
Determine how you will pay off the loan. You can make a bad situation worse by falling behind on your tax loan payments. Make sure that you can live with the terms before you sign. Otherwise, you could incur penalties and late fees.
Change federal withholding. Many people with large tax bills simply did not withhold enough taxes from their paychecks during the year. Still others sold stock and failed to budget for the capital gains tax. Correct both scenarios and avoid similar problems next year.

For additional tax information, contact the IRS at 1-800-829-1040 or visit them on-line at www.irs.gov.

Contact Advantage Credit Counseling Service for assistance: 1-888-511-2227

Debt Management Program: Frequently Asked Questions

I’ve signed up for your program and my creditors are still calling me. When do you notify my creditors that I have joined the program?

We notify your creditors when we receive your first payment.

How do you notify my creditors?

Your creditors are sent a proposal letter.

What is a proposal?

A proposal gives a detailed description of your account. Your creditors are advised of the proposed monthly payment and the payment date. Most regional and national creditors have internal policies regarding any concessions they may grant to their customers. Concessions can include reducing interest rates and waiving late and over the limit fees.

Do the creditors respond immediately?

The response time varies from creditor to creditor. We generally allow creditors a few weeks to process proposals. If your creditors do not respond in a timely manner, our staff will contact them to confirm receipt of the proposal.

How will I know if my creditors have accepted the proposals?

Some creditors will send you an acceptance letter; others send these letters directly to the Agency. You may check the status of your account by logging in to our website: www.advantageccs.org and clicking on “client login.”

What if my creditors do not accept a proposal?

The agency will notify you if your proposal has been denied and advise you of your options.

Media Spotlight

Pittsburgh—WTAE TV— “Errors on Credit Reports” (January 2, 2007)
Erie—CBS TV— “Paying off Holiday Debt” (January 3, 2007)
Pittsburgh—WTAE TV— “Holiday Debt Hangovers” (January 17, 2007)
Altoona—MSN Money Central (on-line)— “Dealing With Debt” (February 12, 2007
Pittsburgh—WPXI TV— “Tips For Getting Out Of Debt” (February 15, 2007)

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