Weekly Settlement Statistics

Total for the week of May 19-23, 2008:

• Total Debt Settled - $158,311
• Total Settlement Amount - $56,738
• Settlement Percentage - 35.8%
• Total Cases Settled - 29

Best Settlement:

• Current Claim - $9,637
• Settlement Amount - $1,328
• Percentage - 13.8% (negotiated with an original creditor)

Worst Settlement:

• Current Claim - $517
• Settlement Amount - $414
• Percentage - 80% (negotiated with an original creditor)

Technorati Tags: debt forgiveness

Debt Settlement Programs Can’t Help Everyone

Most companies in the service industry are focused on enrolling as many clients as they can.  Provanta is no different, but we do have to decline requests for enrollment from time to time if debt settlement simply is not a viable option for them. 

A woman who was referred to Provanta through the local Better Business Bureau (who has been kind enough to refer a number of clients) walked into our office last week and asked to speak to someone about our program.  Luckily, I was available to speak with her.  We spent about 45 minutes talking about our services.  I provided her an estimate for her program based on her current statements.  She said enthusiastically that she wanted to enroll into the program because it would help her financial situation and she felt comfortable with our approach and background.  We set up an appointment two days later for her to come back and complete an enrollment application.  I asked her to bring along some other documents including a pay stub and a list of all her monthly expenses.

During the appointment, I realized she only made about $2,600 a month after taxes but her monthly expenses with her mortgage, car payments, medical bills, food costs, etc totaled over $4,500.  She was upside down nearly $2,000 per month.  There was no financial way she could afford her current expenses let alone the additional $1000 she would need to provide for the debt settlement program — she owed $58,000 on credit cards.  Even if she was able to eliminate her mortgage and her car payments tomorrow, she still could not afford the program.  It was difficult for her to accept.  She asked me to ignore her income and she asked if I coud even lie about her income to our underwriters.  She insisted that she would find a way afford the program and she would make it happen. 

I had to be firm with her and explained that it was simply irresponsible and unethical for Provanta to enroll her.  She had over extended herself long ago because of poor budgeting and because her creditors allowed it to happen.  Her creditors should not have extended over $50,000 of credit on credit cards to someone who only makes $2,600 a month and she should not have been able to purchase a home where the mortgage payment accounts for more than half of her monthly disposable income.  It’s unfortunate for her, but she’s at a point where it’s unlikely any debt program could help her.  She asked about bankruptcy and I told her that it may be worthwhile for her to consult with an attorney specialist.  

(Ref. 1509)

Technorati Tags: bankruptcy, debt settlement, BBB, Better Business Bureau, debt settlement underwriting, bankruptcy attorney

Excerpt From A Client Letter

Excerpt from a client’s written request to close her debt settlement program with Provanta received on 5/22/08:

I am writing to inform you that I would like to close my Provanta account with a full refund of any funds still in the account.  Since (the final creditor) wont’t talk to you I will call them and take care of the final account.  I thank you for all the help for getting my credit back in order.  I have found that I can live without credit cards.  Thank you for that.

Provanta settled 4 accounts for this client.  The current claim on these 4 accounts at the time of settlement was $38,271.34.  The accounts settled for a total of $17,294 and the client has received a gross savings of $20,977.34.

(Ref. 1508)

Technorati Tags: debt settlement savings, debt settlement testimonial

Being Perfect is Hard But You Still Have to Try

Sometimes our clients are exasperated by the amount of questions our Program Management Department asks them when they call in to request an EFT (Electronic Funds Transfer) reduction or skip.  The line of questioning often includes:

1. What is the exact reason for your request?
2. Is there any other way for you to pay for that unexpected emergency, expense, etc?
3. Can you reduce or cut back on any other expense this month instead of using your Settlement Fund?
4. Have you reviewed your entire budget to determine this? If no, let’s go through it together.
5. Can you pay for that unexpected expense over the next few months instead of all at once?
6. Can you obtain the money elsewhere?
7. Can you increase next month’s EFT to make up for this?
8. Can you increase any future EFTs to get you back on track with your EFT schedule?

It is not our goal to give our clients the third degree every time they call in (believe me, it’s not that fun for our Program Mangers either), but it’s extremely important that our clients maintain the EFT deposit schedule if we are to provide the best results possible for them.  Provanta cannot effectively negotiate for debt forgiveness settlements to creditors if there are no funds to work with.  In addition, if a client reduces or skips their EFTs and does not make up for them in the future, our client’s program will undoubtedly take longer than the original estimated time frame.  Longer programs expose our clients to higher chances of above average settlements and higher chances that the creditor may give up on negotiation process altogether and look into litigation.

This does not mean we deny our client’s request.  We understand more than anyone else that life happens and there will be unexpected emergencies during enrollment.  That’s why we honor most of the requests without having to resort to a suspension or withdrawal of services, action reserved for egregious and repeated abuse of the client agreement.  We just want to make sure the client understands that the EFTs need to be placed at the top of the priority list, along with other absolute necessities such as mortgage or rent, food, utilities, car payments, medical payments and insurance. 

Technorati Tags: debt settlement program, debt forgiveness, debt negotiation, financial settlements, debt consolidation

Why We Love Referrals

Referrals often make for the best clients. Why? Because it is usually a friend or family member that referred them to the Provanta Debt Settlement and Forgiveness Program. A referral usually has the added benefit of seeing how a debt settlement program works before they commit to enrolling. While individual experiences may vary, a referral who has been able to closely observe their friend or family member going through debt settlement process is acutely aware of how successful Provanta is with their settlements, while at the same time recognizing that it’s not a walk in the park and requires a serious commitment. Seeing this track record of success over a long period of time with a client ultimately helps a referral make that decision to contact us and to eventually enroll themselves.

There’s also a secondary aspect, one of trust. One difficulty that Provanta encounters is the self-fulfilling prophecy of creditors and collectors who attempt to sabotage the program. Not all, but some creditors, once aware of the client’s enrollment, will contact the client and inform them that they have made an error, that they “don’t work with debt negotiation companies” — this, in spite of the fact that we can prove that they indeed do. The client then takes that information seriously, and failure becomes self fulfilling because they have lost (or never gained) the trust needed to ignore those creditor admonitions and proceed ahead. Clients that have come by way of referral already understand and trust it can work, so they are far more willing to disregard the creditor’s admonitions (or, better yet, refuse to discuss it with them) and let the program run its course.

Technorati Tags: debt settlement referral, referral incentive, debt forgiveness

The Good and the Bad

One of the largest programs we’ve enrolled into the Provanta Debt Settlement Program belongs to a retired couple who joined Provanta a little over a year and a half ago.  They enrolled with over $240,000 of unsecured credit card debt on over 10 accounts.   

The positive update on their program is that we have settled 5 accounts for them so far.  The total original claim on these accounts was $125,000 and the total current claim at the time of settlement was $148,000.  We settled the accounts for total of $48,000.  The clients have received a gross savings of $100,000.

The less positive update on their program is that they just received a summons from one of their creditors.  The balance on the account is $10,000 (one of our client’s smallest accounts) and the creditor has refused to settle.  In order to try to prevent further legal action we contacted the client to see if they could provide additional funds to pay the balance in full (something we do only in extreme situations).  Unfortunately, they could not.    

Our clients have always been aware that litigation was a possibility and they accept their situation and our services for what it is.  They understand that we cannot stop litigation but we can give their creditors information about their financial hardship to try to deter them from choosing litigation.  Since they don’t have the money to pay this particular creditor they’ve asked us to focus our efforts on the other creditors who have not pursued legal action.  They understand litigation may continue and even possibly turn a judgment, but at this point, there is nothing the clients can do about it and they plan on dealing with it if it actually happens.

We agree with the client’s decision and assured them that even while we work on the other accounts, we will stay in touch with this particular creditor.  They may come around eventually and want to settle in the future because from our experience even legal accounts can be settled.

(Ref. 1507)

Technorati Tags: debt settlement, debt collection lawsuit, client stories, financial hardship, debt forgiveness

Weekly Settlement Statistics

Total for the week of May 12-16, 2008:

• Total Debt Settled - $58,603
• Total Settlement Amount - $22,569
• Settlement Percentage - 38.5%
• Total Cases Settled - 17

Best Settlement:

• Current Claim - $4,404
• Settlement Amount - $718
• Percentage - 16.3% (negotiated with an original creditor)

Worst Settlement:

• Current Claim - $1,721
• Settlement Amount - $1,205
• Percentage - 70% (negotiated with an original creditor)

Technorati Tags: debt forgiveness

Fighting Fire With Fire

Sometimes, it’s like a battlefield…

In October 2007, Provanta negotiated a settlement on a $12,900 account with a collection agency who was representing the original creditor.  As with all settlements, Provanta required the collection agency to supply a written settlement agreement before any payment to them.  We received the written agreement, sent the settlement payment of $5,600 to the collection agency, and saved our clients a gross amount of $7,300. 

Three weeks later, Provanta received a call from a supervisor at the collection agency.  She informed us that the original creditor recalled the account and as a result they could not proceed with the settlement agreement.  This was completely unacceptable to Provanta, for we had a valid, signed settlement agreement that was in already in place, performed upon, and the payment accepted. 

To make matters worse, the original creditor sent the account to a collection attorney who threatened to sue our clients unless they paid the balance in full.  This was the last straw for Provanta, and we contacted an attorney that we have worked with for many years.  He specializes in consumer law and FDCPA, Fair Debt Collection Practices Act, violations.  He was more than happy to assist our clients. 

It took about 6 months and lot of letters to reach an agreement but we finally did.  In the end, the collection attorney agreed to accept the $5600 original settlement agreement, or deal with a lawsuit against themselves, as well as the original creditor, should they persist.

Technorati Tags: FDCPA, Fair Debt Collection Practices Act, debt settlement, accord and satisfaction, consumer law, consumer protection, FTC

(Ref. 1506)

Outstanding Clients

Provanta negotiators were able to reach two settlement agreements for a particular client this month.  As with all settlements negotiated on behalf of clients, we must have approval from them in order to complete the settlement. Often, settlements have to be done quickly in order to close a deal, and it can be frustrating trying to reach the client for approval.

These dutiful clients responded within two hours, because they appreciated that when the settlement department gets in touch it is usually good (and time sensitive) news.  The First was a 40% settlement of $393.61 on a balance of $984.04.  The Second was also 40%, in which we’ll settle a $2,712.88 balance for $1,085.16.

Thanks to their diligence, they are two steps closer to getting out of debt.

Fee Harvesting

During the course of a conversation with a young woman about her debt, she gave me some very interesting information about one account she had with a balance of about $475.  It turns out she opened this account about 4 months ago with a very large and popular credit card company.  She did so in her last attempt to manage her debt on her own and avoid having to enroll in a debt program or filing bankruptcy.  She was hoping that this card, which only had a $500 limit and low interest for the first 6 months, would give her some cushion to pay for increasing food and gas prices while she the juggled the payments on her other 6 accounts.  She admitted to me that this was not a well thought out plan to begin with and I had to agree with her. 

Anyway, she had the card for about a  month and she hadn’t even had a chance to charge anything yet when she received her first statement.  There were 4 charges on the account-an initiation fee of over $100, an annual fee to be in a rewards program for $25, another monthly maitenance fee of $10, and a set up fee of $25.  She had already accumulated over $150 of debt with this company and she not even signed the back of the card yet.  Needless to say her struggles with her budget and debt did not improve.           

This is an example of fee harvesting and it’s something that I’m coming across more and more as I talk to clients about their experiences.  Fee harvesting generally refers to a credit card company’s practice of applying fees to a customer’s account so that the interest drawing balance continues to grow even if the person is no longer actively using the account.  Simply put, it allows a creditor to charge you a fee and then charge you interest on the fee.  Highly profitable for the creditors, and highly dangerous for individuals who do not read the fine print when they sign up for these offers that sound too great to be true.       

Technorati Tags: fee harvesting, interest rates, credit card practices, budgeting, bankruptcy, debt options, credit limits, debt consolidation

Honesty Pays Off

As mentioned here Provanta clients must have a financial hardship for us to work with them. When a client is forthcoming and presents us with detailed hardship, it very often pays off well. A client with a particularly serious hardship is always a bonus for negotiating.

For example, a Provanta client was out of work for a extended period of time, due to his donating a kidney to his daughter and living off credit cards. A Provanta negotiator presented his hardship with supporting documentation to a creditor and was able to settle an account that had a current balance of $13,067.00 for $2,456.00 or 18.80%.

The opposite is true of those clients who are not as forthcoming. A client that is less than honest with us at enrollment may see a higher settlement percentage. An example would be a client that has assets they did not tell us about such as real estate, or open lines of credit. Many times the creditor or agent will have access to more information about client, such as a current credit report. It very difficult to negotiate a good settlement for a client when it is discovered on the credit report that they just financed a new Hummer.

(Ref. 1505)

Technorati Tags: debt settlement, financial hardship, debt collector

The Most Commonly Asked Question of the Day

“Can I keep a credit card out of the program to be used for minor expenses each month or if there was an emergency?”  The unfortunate, and fortunate answer, is no, you cannot continue to use credit cards while in a debt settlement program if you want to receive favorable results.

The reason why I say the answer is unfortunate is because I understand the comfort of having an emergency credit card handy.  Like most Americans I began using credit cards the day I turned 18 and was set loose on a college campus full of low-interest, introductory credit card offers.  Relying on credit cards for your daily needs and desires is a hard habit to break and like most other vices such as smoking, it is hard to quit cold turkey.  We probably live in one of the most superficial and materialistic times in history and this has been heavily influenced by the credit card companies’ clever marketing message that tells us it’s okay to acheive the American Dream on credit or you can have your cake and eat it too as long as you are willing to pay for that cake 10 years from now because that’s how long it may take you to pay off that credit card bill.  When I realized this, I realized the comfort of using credit cards is not all that comforting after all.

Even though the credit card habit is hard to financially and mentally break, it can be one of the most rewarding and liberating things you can do for yourself.  You are no longer subject the credit card companies’ change in policy, increases in interest rates or minimum payments.  You can plan your life around goals like retirement, a dream house, paying for your child’s college education instead of planning your life around making next month’s minimum credit card payments.   

From a debt negotiation standpoint, we simply cannot help you get out of debt if you continue to use debt.  Our goal is negotiate with your creditors, establish your financial hardship, and work out a settlement arrangement for you.  From our experience, your creditors are likely to review your credit activity during this process.  If they see you are still actively using credit cards they may question your commitment to the program and ask themselves, why should we allow your client to pay us less than she owes, when she is still accummulating debt and paying those creditors in full?   

As for emergencies that may come up during your program, there are often ways to work around those emergencies without relying on credit cards.  Our clients often contact us when they have an unexpected expense and we review their options, review their expenses, and find ways to rearrange their budget.  We will help you through your emergencies as best we can.  So if you have a fear of not being able to use credit cards, think of the thousands of people Provanta has helped in the past 15 years and believe me, if they can get through 2-3 years without credit cards, you can too!  

Technorati Tags: credit cards, budgeting, emergency credit, financial goals, debt negotiation, debt settlement, student debt

Transparency

Probably the primary reason in going to a blog format for our corporate website was to demonstrate transparency in those elements of our services that might be of some concern to potential clients. The nature of our services are such that we set about to solve serious problems that some people find themselves in. You may be able to do without many of the goods and services you could buy — or consider buying — because not having those goods and services is not really a problem in your life. But when you can’t sleep at night, or when financial hardships cause friction between spouses, resulting in lots of stress on the kids, then there might be undue motivation to engage the sorts of services we have to offer.

Accordingly, we want to be particularly careful that you’re really, really sure that you want to do this. It’s not a walk in the park. It’s “surgery,” in a sense, and though the light at the end of the tunnel is indeed bright, warm and pleasant, the path to that light is not without risks and unpleasantness. You need to understand that potential, accept it, and commit yourself to doing the best you can to tolerate it. Some people can’t, and we want you to know that.

I could probably write a nice long post about all the aspects of transparency, why it’s good for everyone, and why it’s the future of business. But if I did, it would surely not be as good as Greg Swann’s post on the same topic. Greg is a Phoenix Realtor, a longtime friend and business associate, and he practices transparency against the prevailing tide.

Technorati Tags: debt settlement, marketing transparency

Weekly Settlement Statistics

Total for the week of May 5-11, 2008:

• Total Debt Settled - $67,104
• Total Settlement Amount - $25,975
• Settlement Percentage - 38.7%
• Total Cases Settled - 13

Best Settlement:

• Current Claim - $3,620
• Settlement Amount - $762
• Percentage - 21.1% (negotiated with an original creditor)

Worst Settlement:

• Current Claim - $5,589
• Settlement Amount - $3,912
• Percentage - 70% (negotiated with an original creditor)

As always, gratitude and appreciation is extended to the creditors, collectors and collection lawyers who were instrumental in forgiving $41,129 in debt last week to the benefit of themselves (stop spending good money to maintain a bad position) as well as to the benefit of our clients with financial hardships.

Technorati Tags: debt forgiveness

Did You Know All This?

While we at Provanta celebrate and applaud the do-it-yourselfer, it’s a step that ought not be taken lightly without really considering what you need to know in order to set yourself up for success. Let’s consider one aspect of settling your debts, working with debt collectors.

Here’s a post from a lawyer explaining just a bit about the Fair Debt Collection Practices Act (FDCPA), as enforced y the Federal Trade Commission (FTC):

“No, A Debt Collector Can’t Threaten You With a Baseball Bat”

At Provanta, our negotiators know the legal rights of its clients. What’s more, the collection agencies know that Provanta knows, so this in itself tends to protect clients from the worst abuses. Even still, our clients file a significant number of complaints every year on the FTC website.

Technorati Tags: fdcpa, fair debt collection practices act, debt collector

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