Know Your Rights!

If you’ve ever had to deal with a debt collector, then you would know it’s like stepping into a boxing ring for a fight against one of the toughest in the industry. Knowing just your simple rights as a debtor will prepare you for what could be a long, emotionally draining battle.

The Fair Debt Collections Practices Act (FDCPA) was created to help protect you, the debtor, against the unlawful and abusive tactics that these collection agencies practice everyday. Just knowing the restrictions that are placed on these collection agencies will prepare you when it comes to dealing with them directly. For more information on what a creditor can and can’t do, please visit:

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm

Just remember, creditors are use to dealing with debtors who know nothing about their rights and therefore bully consumers into providing what they want. It is important that you stay strong and do not give into the creditors scare tactics. Do not be afraid to stand your ground and let creditors know that you are aware of your rights and ability to file official complaints with the Federal Trade Commission (FTC). The creditors are simply pushing you as far as they can, so do not be afraid to stand up for yourself.

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Stop Using Your Credit Cards

Someone recently asked me if they could continue to use their credit cards while enrolled in the program. This question never ceases to amaze me. 

If you’re at a point where you realize you need help with your financial situation, then you should already understand that using any forms of credit is doing nothing for you besides digging a deeper hole of debt. Not only do you need to realize that you will be further in debt than you already are but the consequences that lie behind your actions. 

How would a creditor take this? Your creditors have access to pull and review your credit report, and how would it look if they saw that you have been opening new lines of credit or see that you have the ability to make monthly payments to other creditors. Because of the appearance of bad-faith on your part in the eyes of your creditors to which you are delinquent, it is likely to keep you from receiving debt settlement benefits as favorable as those received by debtors who have stopped using their credit cards. It may also increase the risk that these creditors will refuse to negotiate a debt settlement in favor of filing a law suit to collect the amount they claim is owed to them.

Don’t stress over having to use any form of credit.  Credit cards weren’t introduced until the mid 1900’s and since then the ability for consumers to save rather than charge has become almost non-existent.  Any form of credit is nothing but a temporary “fix” on situations.  While you may be able to escape some of your problems at the present time through the use of credit cards, it will eventually catch up with you in the end.

Technorati Tags: credit report, experian, equifax, transunion, free credit report, credit card debt, debt settlement, consumer credit counseling, FICO, financing, home loan, mortgage

Tweeting Debt

You can now follow Provanta on Twitter.

Click here to follow Provanta.

Provanta Launches Video Blogging

video management, video solution, video streaming

Loan Modification - Do It Yourself

Scams - Last week it was announced that Federal and State agencies are targeting foreclosure rescue scams/loan modification fraud.  The complete press release can be read on the Federal Housing Administration website here:

http://portal.hud.gov/portal/page?_pageid=73,7931933&_dad=portal&_schema=PORTAL. 

The California Department of Real Estate also recently launched a website alerting consumers to loan modification service scams:

http://www.dre.ca.gov/mlb_adv_fees.html. 

Contact your State’s Department of Real Estate to see who is licensed to do business in your State.

Just about everyone these days is receiving SPAM e-mails or regular mail advertising loan modification or foreclosure assistance.  Many of these companies are not licensed or registered to conduct this type of business.  Be extremely wary of ANY service that requires an upfront fee.  If you do enlist the help of a loan modification specialist make sure they have a 100% money back guarantee.  It is also important to realize that if they successfully reduce your mortgage payment, even if only by a few dollars, they are still entitled to receiving their fee in most cases.  This fee typically ranges from $2000 to $4000.

You Can Do It Yourself - Start here: http://www.hud.gov/offices/hsg/sfh/hcc/fc/.  The U.S. Department of Housing and Urban Development has approved counseling agencies that are equipped to provide you with advice for FREE.  Before you go and pay someone to modify your loan do yourself a favor and speak to an approved counselor about your situation.  In most cases they will assist you in making a decision and with providing the lender the requisite information so that your lender’s loss mitigation department can process your request.

Another fantastic resource is Hope Now (www.hopenow.com), an alliance between HUD counseling agents, mortgage companies, investors, and other mortgage market participants that provides free foreclosure prevention assistance.  Take some time to explore the website and resources available online.  If you are not comfortable accessing information online feel free to call them directly at (800) 995-HOPE.

If you have the time and desire you can most likely work directly with your lender to successfully modify your home loan(s).  This process is going to require a lot of patience and determination but it’s not overly complex.  In most cases the lender is simply going to require that you provide an outline of your budget (monthly income and expenses aka profit and loss statement), a hardship letter, and some form of income verification for the past six months (pay stubs if you are employed or bank statements if you are self-employed).  Once they receive this information it will typically take the bank’s loss mitigation department between 4 - 12 weeks to review your file.  This depends entirely on how backed up the lender is.  Keep track of everything you send and how.  You may quickly discover that it is difficult and frustrating dealing with your lender.  Don’t give up.  Make sure they get your faxes.  Make sure they answer the phone.  Find someone to speak with that communicates well and call them every week until your loan modification request is complete.  Every lender is different in how they handle loan modification requests so make sure you continually ask them if they need anything else.  Make sure they have all the information they need to make a decision for you.

Technorati Tags: do it yourself loan modification, loan modification hardship letter, loan modification scams, HUD, U.S. Department of Housing and Urban Development, DRE, Department of Real Estate, Hope Now, foreclosure counseling, foreclosure prevention, modify your loan, foreclosure rescue scams

Post Settlement Verification

Since accounts are sold and outsourced to different agents to collect so often it is easy for an agent to forgot or overlook an account when they update their system. Sometimes it’s a matter of the creditor / agent just closing the account in their office.

This situation is pretty simple to correct. Our client service department will contact the current collector and inform them the account has already been settled. Agents will request settlement documentation at that time which we will provide (acceptance letter & copies of all checks cashed if available) we do this as a courtesy to our client. Technically once we inform a collector that an account has already been settled it is their responsibility to go back to the original creditor and confirm this info. Once we provide the settlement information the accounts are closed and no further collect attempts are made.

In rare situations it will take a second conversation with the collector to get the account closed and marked as settled. Our clients can also pull a credit report and dispute the account in question to ensure no further collection action is taken. The client can also file a complaint with the FTC if the agents start to harass them after collection proof is provided.

There is only 1 time that I can recall that collections efforts escalated into litigation. In that situation the client went to court, provided all settlement documentation to the judge, and the case was dismissed.

In a nutshell this is a easy problem to fix.

 

Technorati Tags: debt settlement, settlement verification, third-party collection, litigation, collector, client service

Do Not Spend Your Tax Refund

If you received a tax refund this year please do not spend the money.  The first and best option is to save the money for a rainy day.  Most financial advisers recommend saving at least six months worth of net income in the form of savings for that proverbial rainy day.  If you don’t have this much money saved start saving now.

If you already have plenty of money in your savings account consider opening a Roth or traditional IRA.  These retirement accounts will help you save money and possibly reduce your taxable income.  If you strategize appropriately they will help you pay less in taxes once you do retire.  For more information see:

http://www.investopedia.com/articles/retirement/03/012203.asp.

Of course, if you have a significant amount of unsecured debt you MUST create a plan to pay off this type of debt before you even consider saving money, either in a traditional savings account or for retirement.  Unsecured debt (credit cards etc.) will continue to hold you back financially until you pay them off… completely!  If you have debt use your task refund to either pay off your debt completely or create a plan to pay it off within a year.  If you cannot pay off your unsecured debt within two years on your own consider utilizing the services of a reputable Consumer Credit Counseling Service (CCCS) or Debt Settlement company.

Technorati Tags: tax refund, taxes, saving, IRA, Roth IRA, retirement, consumer credit counseling, debt settlement, budgeting, save

Cut Up Your Credit Cards - Now!

Credit cards, personal loans, and any form of unsecured credit is pure evil.  The average American consumer does not need credit cards or ready access to unsecured credit.  Credit cards peddled at college campuses truly are the “starter drug” that gets consumers hooked on living on credit. 

Advertising for credit reports and credit monitoring services simply perpetuate this belief that one’s credit score (aka FICO score) is the one and only indication of creditworthiness.  The invention of the credit card (unsecured line of credit) and the FICO score have become the bane of many Americans’ existence.  Hardly a day goes by where I don’t see a TV commercial for free credit reports or free credit reporting services.  Hardly free, these services continue to increase awareness in consumers’ minds that their credit score is the most important financial aspect of their lives.  Wrong!

The single most important aspect of one’s financial position is life is their ability to SAVE money; not spend it.  The next time you get a paycheck don’t think about what you can buy.  Rather, think about how much you can save.  Set worthy financial goals for yourself such as paying cash for your car.  Do NOT finance consumers goods… period.  These days, the only item you should ever need to finance is your home.  This is a relatively reasonable purchase to finance because property values have historically increased, there are tax benefits, and as a result it is considered an asset.  Unless you are business owner, you should not have to finance anything else.

Just spend a moment thinking about how your parent’s and/or grandparent’s generation made it through life.  I guarantee you they did not leverage every penny they earned financing furniture, appliances, tv’s, cars, homes etc.  Next time you have a family get together ask the oldest living member of your family how they managed/manage their finances.

Technorati Tags: credit report, experian, equifax, transunion, free credit report, credit card debt, debt settlement, consumer credit counseling, FICO, financing, home loan, mortgage

The FTC Fights Back

In an effort to educate consumers the FTC (Federal Trade Commission) launched a campaign today debunking the silly and false advertising associated with the television ads for FreeCreditReport.com.  The only website for consumers to legitimately obtain their credit report for free is found at www.annualcreditreport.com.

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Can I Avoid Bankruptcy?

Often times this question simply boils down to cash flow.   If one has enough net income every month to pay for their living expenses and there’s a little left over for one’s creditors then bankruptcy might be avoided.

If you are struggling to make your monthly payments to your creditors it’s time to take a hard look at your budget.  Take a few moments to prepare a simple budget analysis to determine if you have sufficient cash flow to make ends meet.  If you’re running negative then it may be time to arrange for a free consultation with a qualified bankruptcy attorney.  However, if you have a little income left over to work with then bankruptcy could be avoided.  For more information on budgeting see: “Can You Afford A Debt Settlement Program”.

Qualifying for bankruptcy can be tough.  There are several means tests that a qualified bankruptcy attorney will perform in order to determine if you should file either Chapter 7 or Chapter 13 bankruptcy.  If you actually qualify for bankruptcy you are in essence rescinding most of your control over your finances.  Additionally, the cost of filing usually starts at about $1,500 and goes up from there depending on the complexity of your circumstances.  See http://www.provanta.com/bankruptcy/.

Take a moment to determine if you really are Living Beyond Your Means.  If you make some time now to examine your financial circumstances you may be able to avoid impending financial ruin.  Don’t wait until it’s too late to to take a hard look at your finances.  It may be painful but once you do you will be that much closer to experiencing financial freedom.  You may have several options from CCCS (consumer credit counseling services), to debt settlement, to bankruptcy.  However, if you wait too long you may ultimately limit yourself to the last and most painful option of bankruptcy.

Provanta is not a law firm and none of our employees or contractors are attorneys.  However, if you are interested in determining if you qualify for our debt settlement program please feel free to contact us for a consultation.

Technorati Tags: bankruptcy alternatives, alternatives to bankruptcy, debt settlement, debt forgiveness, budgeting, budget, bankruptcy attorney

Money Basics - What Exactly Is Money?

When one ponders how money is made thoughts often turn to images of a press churning out millions of dollar bills.  The reality though is that money is made every time a loan is given.  The government is not necessarily the primary creator of money.  Banks are.  These days you may hear about the economy contracting or shrinking.  This simply means that there is less available credit and fewer loans are being issued by lenders.  Economic growth is directly tied to the ability of banks to give loans.

A few months ago a friend of mine sent me a link to wonderful video produced by Paul Grignon that explains in very simple terms what money is and how it is made.  While it may bit a little bit on the long side I found it extremely entertaining and informative.  No matter what your age or background I am sure that you will find it very enlightening. 

“Money as Debt”

If you are unable to view the video above click here.

Technorati Tags: money as debt, economy, credit, loans, financing, money education, monetary theory, paul grignon

Former Client Blog

Shonna Ritchey, a former client of Provanta has nothing but good things to say about her experience in the Provanta Debt Settlement program.  I hope you find the story of her journey to living debt free encouraging and inspiring.

“So when my beautiful son decided to try to come 3 months early the doctors put me on bed rest so I ended up with a 6 month maturnity leave wich was not in my budget. I called Provanta (with that dredful knot in my stomache thinking here we go again) to explain the situation they were kind and delightful and answered politely so what can you afford to send us today shonna? No judgements, no threats, no nothing. Just a simple what can we do to help? What can you afford? They were wonderful.Provanta settled my 19,000 debt down to about 7,000 in just a little over 2 years. I would recommend Provanata’s program to anyone listening. Provanata helped me in a great time of need and prevented me from filing bankruptcy. I owe them great gratitude what they had done for our family and our debt crisis. With today approaching a failing economy, everything going up (but our paychecks) were are you to turn for help with your debt? People are stuggling with finances more now than ever. Divorce is on the rise and people are starving. Older couples are freezing to death literaly in their homes because they cant afford heat.”

Technorati Tags: debt forgiveness, debt settlement

Monthly Debt Free Clients

Total Debt Free Clients November, 2008

• Total Clients Debt Free -9
• Total Debt Settled - $204,645
• Settlement Amount - $129,733
• Savings - $74,912
• Average Percentage of Settlements - 58%
• Average Program Length - 42.56 months
• Best Settlement - 31%
• Worst Settlement - 79%

Technorati Tags: debt forgiveness, debt settlement

Monthly Settlement Statistics

Monthly Settlement Statistics

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