Frequently Asked Questions

If you've got questions about any of our debt relief services, we invite you to click on the specific service you're looking for help with below.

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Credit Counseling & Debt Management

It has never been our policy to criticize another organization. All agencies should be trying to help you, but there are many differences between us and other debt relief services. Some of the differences between us and the other agencies include:

  • We provide a full financial assessment of your situation, including a budget analysis and evaluation, to determine the advice needed for your situation. We'll go over all your options together and determine the course of action you can take to improve your financial situation.
  • We provide extensive post-counseling opportunities, including counseling sessions, mailings, phone calls, and free education that promotes budgeting, savings and an understanding of credit fundamentals. The support that we provide enables us to continue working with individuals to help ensure that they begin to incorporate the advice that can ultimately help them achieve their financial goals.
  • We have a state-of-the-art automated telephone system that provides account information to our clients and creditors 24 hours a day, 7 days a week.
  • One of the greatest benefits of working with a credit counseling agency is all of the valuable financial education you'll receive. In addition to the specific information provided to you by our nationally certified counselors, you will also receive a free "Learn Now or Pay Later" workbook. Additionally, we provide a wealth of free financial information on the education page of our website. In addition, each week you'll receive an e-mail linking you to the latest episode of our "Personal Finance 120" video series. Our clients also receive a subscription to our newsletter, the Cambridge Quarterly.
  • After you've made your first four payments through our agency, our Benefits Verification and Analysis Department (BVAD) will audit your account to ensure that it is receiving the full benefits normally extended by each specific creditor involved. If it isn't, we'll determine any adjustment that must be made to ensure your success on the program.

At no cost to you, our counselors provide a thorough budget analysis and evaluation to determine the advice needed for your situation. After we complete that full financial assessment and go over all your options, if you decide that a debt management program is right for you, we'll send you a full breakdown going over any fee you'd be charged, if any, and what you would be saving by using a DMP. If you choose to become a client, your fees will be based on the rules and regulations set by your state. And although our initial and monthly fees are capped at $75 and $50 respectively, our average initial fee is just $40.00, and the average monthly fee is only $30.00.

You have access to all of your account information through the "Clients" section of our website. Your information is kept on a secure server to ensure your privacy. As a registered client you will be able to:

  • View your account 24 hours a day, 7 days a week
  • View payment disbursements
  • Print out detailed payment reports
  • Add and remove creditors
  • Much more!

According to FICO, the recognized authority in the credit scoring business, participation in a DMP is not a factor in your credit score; it is considered a neutral mark. Some creditors will report your participation to the credit bureaus after your accounts are closed, and there are still some lenders out there who will view this negatively, even though you're taking control and dealing with your situation.

Debt Management programs (DMPs) traditionally assist individuals with the following types of debt:

  • Credit cards
  • Personal loans (unsecured)
  • Personal loans secured by household items, such as furniture, appliances, etc.
  • Past-due balances on telephone bills, cellular phone bills, electric bills, etc., as long as the client no longer resides at the same residence and the debt is for an old and inactive account
  • Student loans
  • Collection accounts
  • Lines of credit
  • Disconnected utility bills
  • Medical bills
  • Repossessions (if the items has been resold and an unpaid balance remains)

Bankruptcy is a legal proceeding that individuals and corporations use to discharge many types of debt. Not all types of debt can be discharged, and individual states have their own rules. For more information on filing for bankruptcy, we recommend that you seek the advice of a reputable local bankruptcy attorney. They're usually listed separately in the yellow pages. We are a credit counseling service, here to give you advice and education to help you improve your financial situation and avoid bankruptcy, if reasonably possible.

Cambridge is a 501(c)(3) not-for-profit corporation organized under the general laws of the Commonwealth of Massachusetts.

Cambridge Credit Counseling Corp. has gone to great lengths to ensure that individuals receive superior service for all of their credit counseling needs, as well as the education necessary to help them reach their financial goals. Cambridge has been a registered ISO 9001 organization since 2001. Unlike other accreditation services that are recognized only in the United States and Canada, ISO 9001 is recognized and accepted worldwide.

Code of Practice - Cambridge is accredited to the Financial Counseling Association of Americs's (FCAA's) Code of Practice, which consists of rules that strictly govern the actions of credit counseling agencies. If you would like more information about the Code of Practice, please visit our Counselor Certifications page.

National Certification - As counselors reach their six (6) months of hire or transfer into the Credit Counseling department, all must achieve and maintain certification through the National Foundation for Credit Counseling, the largest and longest-serving nonprofit financial counseling organization in the United States. As a condition of their employment, they must complete approved continuing education courses every two years to maintain their certification certificates.

If you would like more detailed information about our program, please contact our office at (800)235-1407 to speak to a counselor. One of these professionals will contact you shortly and address any questions you may have.

The accounts we handle will be closed while you're on our program. Once you've paid off the accounts in full, you would need to re-apply with the banks. They will evaluate your credit history at that time, and this will determine if they are willing to extend you credit.

Bankruptcy Counseling

The cost for our Pre-Filing Credit Counseling Briefing is $25. The cost for our Pre-Discharge Debtor Education course is also $25. There is no additional charge for couples who wish to take either course together, and each person will receive their own certificate for each course that they complete.

Yes, Cambridge is committed to maintaining your privacy and online confidentiality. All data transmitted to and from our agency is completely secure.

Consumers filing for bankruptcy protection can file on their own; however, bankruptcy laws can be quite complicated. A trusted attorney may prove to be helpful. To find a bankruptcy attorney, consumers can ask someone they trust to recommend a good attorney or contact a Lawyer Referral Service sponsored by a State Bar Association. Filers should make sure that their lawyer specializes in bankruptcy. Potential attorneys should be asked specific questions about their qualifications and fee structure. Finally, consumers should schedule time to meet with the lawyer to determine if they are comfortable working with this person. Filing bankruptcy can be an emotional event so it is important for filers to have a good relationship with their attorney.

Our Pre-Filing Credit Counseling course is available online, over the phone, or in-person. Our Post-Filing Debtor Education course is available online or in-person. In-person sessions will be held at our offices in Agawam, Massachusetts.

Payments are accepted online or over the phone. We accept major credit cards, debit cards, money orders, and ACH (electronic debits).

The pre-filing credit counseling course takes an average of 60 minutes to complete. The pre-discharge debtor education course takes a minimum of 2 hours. The time requirements conform to the EOUST (Executive Office for U.S. Trustees) program guidelines.

Certificates are available within 24 business hours.

The certificate(s) can be sent to the client and attorney via email, fax or US postal service. These preferences are specified by the client during the registration process.

Yes. Joint filers are encouraged to work through the courses together. There is no cost difference for single filers or couples.

Yes, another person, such as your spouse or attorney may purchase the course for you.

The certificate of completion for non-profit budget and credit counseling (pre-filing credit counseling) is valid for up to 180 days after the date that the counseling was completed. The Final Rule (28 C.F.R. Part 58) does not specify an expiration date for a Debtor Education (post-filing) certificate. For further explanation on this matter, it's best to speak to your attorney.

Foreclosure Counseling

Have a housing counselor from a non profit HUD approved housing agency assist you can make the process a lot easier on your end. Our counselors know the ins and outs of the servicer's requests. They can do follow ups and help you with any questions throughout the process. They also keep a full file for you in order to keep track of everything that was sent to the servicer. If and when the servicer makes a decision our counselors can explain what needs to be done or they can negotiate with the servicer to make possible changes.

There is no charge for foreclosure counseling. This is a free service that we offer because we are a non profit HUD approved agency.

We have an intake department that will take down some basic information from you and go over a budget. You should have a good idea of your monthly income and your monthly expenses. The intake person will send you forms that you will need to read over and send back to us in order for a certified counselor to call you. Once we receive these forms a certified housing counselor will call you and go over some options and let you know what you need to gather in order to move forward.

A loan modification is a written agreement that permanently changes one or more of the original terms of the loan. Modifications can include:

  • Reduction of the interest rate of your mortgage
  • Reduction of the principle balance
  • Extension of the maturity date of the mortgage
  • Change in the type of loan product (example: changing an "adjustable-rate mortgage" to a "fixed-rate mortgage"
  • Increase in the unpaid principle balance caused by capitalizing the delinquency

Please click here to read our article about Mortgage Modifications for a more detailed explanation.

This is one way to avoid foreclosure. It's the sale of a property for less than the amount necessary to pay off the loan in full. The lender agrees to accept the proceeds of the sale as full satisfaction of the borrower's debt. The property must be sold "as is". The borrower may not receive any cash or other valuable consideration from the transaction. The lender usually agrees to not seek a deficiency judgment for any loss they may experience.

This is when a borrower voluntarily conveys the title to the lender in exchange for a discharge of the delinquent debt. The lender may assume all of the homeowners' responsibilities and liabilities with the respect of the property including: payment, subordinate liens, payment of taxes, association dues, judgments and legal liability for any hazardous conditions. They must also take over the responsibilities of a landlord to any tenants living in the property. The Deed In Lieu must be completed within 90 days of the initiation of the process.

Refinancing is an option available for homeowners with a good credit rating. This gives them an opportunity to receive a lower monthly payment and a lower interest rate. It may not be an option if a homeowner's credit rating is not good. If it has been damaged due to delinquency then refinancing will not work out. The interest rates may be high if the refinance is done for someone with a sub-prime loan.

Reverse Mortgage Counseling

A Home Equity Conversion Mortgage (HECM), or "Reverse Mortgage" is a loan that allows homeowners who are age 62 or older to convert a portion of their home's equity into cash. A HECM is a reverse mortgage, which works much like a traditional mortgage, only in reverse. Instead of making payments each month, you are receiving money, and instead of paying down the loan balance, what you owe in a reverse mortgage rises over time. It rises because of the interest you are being charged and the fact that you're not making any payments to offset this interest.

Rather than making a payment to the lender each month, the lender can send you a loan advance each month if you choose. Unlike a conventional home equity loan, a reverse mortgage does not require any repayment of principal, interest or servicing fees as long as you live in your home. You may use the cash you obtain from a reverse mortgage for any purpose. With most home loans, if you fail to make your monthly repayments, you could lose your home. But with a reverse mortgage, you do not have any monthly repayments to make. So you cannot lose your home by failing to make them.

In order to qualify for a reverse mortgage, all owners and co-owners of the home must be age 62 or older and at least one homeowner must reside in the home as their primary residence at least six months out of the year.

If you have any debt against your home, you must either pay it off before getting a reverse mortgage or use an immediate cash advance from the reverse mortgage to pay it off. If you do not pay off the debt beforehand, or do not qualify for a large enough immediate cash advance to do so, you cannot get a reverse mortgage.

You must own your home and all owners must be at least 62 years old. Your home must be your "principal residence" - which means you must live in it more than half the year. For a federally insured HECM, your home must be a single-family property, a two- to four-unit building, or a federally approved condominium or Planned-Unit Development (PUD). Reverse mortgage programs do not lend on cooperative apartments or mobile homes, although some "manufactured" homes may qualify if they are built on a permanent foundation, classed and taxed as real estate and meet other requirements.

The amount of cash available to you depends on the age(s) of the owner(s), the home's value, current interest rates and the specific reverse mortgage program you choose. In general, the older you are and the lower the interest rate, will provide the most cash from a reverse mortgage.

It is your choice and depends on the specific program you choose. You can:

  • Take all of the money up front as a lump sum of cash at closing.
  • Take a monthly cash advance for a specific number of years that you select or a guaranteed monthly payment for as long as you live in the house.
  • Choose a credit line that lets you select the timing and amount of the loan advances on a request basis, until the credit line is exhausted.
  • Choose any combination of immediate cash advance, credit line account and monthly cash advance.

You also will have the option of changing your payment plan type at any time for a fee not to exceed $20.00 if your needs change along the way.

A Home Equity Conversion Mortgage (HECM, or reverse mortgage) must be a first mortgage. If you have an existing mortgage, it must be paid off before closing or paid off at closing with funds you receive from the HECM. Any additional lien against your property must be either be paid off or subordinate to the HECM.

HECMs typically involve four types of costs: an origination fee, closing and other third-party costs, servicing fees and the mortgage insurance premium. With the exception of the mortgage insurance premium, many of these fees can vary from lender to lender. These costs are generally financed into your reverse mortgage loan at closing. Your lender must provide you with a Total Annual Loan Cost (TALC) disclosure prior to your loan closing.

Interest is charged on all money that you receive and on all loan costs that have been financed. You may select an interest rate that is fixed or that adjusts monthly or annually, although all lenders do not offer all options. Your lender must provide you with the index, the margin and the periodic and lifetime caps for adjustable interest rates.

After closing on a HECM loan, you have 3 days to cancel the mortgage if you choose. This is also known as the "rescission period", an important measure implemented to protect the consumer.

When the loan becomes due and payable, you or your estate must pay back all of the cash advances, any fees or costs financed as part of the loan, and all interest that has been charged to date.

HECMs do not have to be repaid until the last surviving borrower has been unable to occupy the home for more than 12 consecutive months, dies, sells the home or permanently moves from the home. You may partially or fully repay the loan balance at any time. There are no prepayment penalties for a HECM.

If your home is sold to pay off the loan, you or your estate are not responsible for paying back more than the amount received from the sale of the home. This may occur if the home's value depreciates, if interest rates go up, or if the total payments made to you during the life of the loan exceed the value of the home.

A homeowner with a reverse mortgage has 3 main ongoing responsibilities:

  • You are required to make timely payments on your property taxes. Failure to do so could result in the loss of your home.
  • You are required to make timely payments of premiums towards your homeowner's insurance. Flood insurance is also required if the property is located in a flood zone. Failure to do so could result in the loss of your home.
  • Your property must be maintained in at least the condition that it was in when the reverse mortgage was taken out. Lenders may perform "drive-by" inspections. If problems are identified, you will be required to remedy them.

The advantages of a reverse mortgage are that you'll be able to remain in the home and retain title of your home without having to make a monthly mortgage payment. There are no restrictions on what you do with the money. The funds you receive will not affect your Social Security or Medicare benefits, and if you choose to take monthly advances, the advances would not jeopardize your eligibility for any state or locally funded programs, such as SSI or Medicaid, as long as the balance in your bank account remains below their required limit on the last business day of the month. You don't have to pay income taxes on the money received, and you'll never have to pay back more than what your home is worth.

The disadvantages of getting a reverse mortgage are that all of the remaining equity in your home can be eaten up by your loan advances, the interest paid and the fees that are being added to your loan balance. This will mean that less equity will be available to you in the future should you need it for other purposes. Also the closing costs can be high and are usually most costly in the short term.