Weekly Debt Free Clients

Total Debt Free Clients July 21 - July 25

• Total Clients Debt Free - 2
• Total Debt Settled - $51,045
• Settlement Amount - $22,169
• Savings - $28,876
• Average Percentage of Settlements - 44%
• Average Program Length - 47.5 months
• Shortest Program Term - 47 months
• Longest Program Term - 48 months
• Best Overall Settlement Percentage - 42%
• Worst Overall Settlement Percentage - 46%

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Weekly Settlement Statistics

Total for the week of July 21-July 25, 2008:

• Total Debt Settled - $216,063
• Total Settlement Amount - $74,728
• Settlement Percentage - 34.6%
• Total Cases Settled - 37

Best Settlement:

• Current Claim - $32,235
• Settlement Amount - $3,315
• Percentage - 10.3% (negotiated with a original creditor)

Worst Settlement:

• Current Claim - $3,411
• Settlement Amount - $2,900
• Percentage - 85% (negotiated with an original creditor)

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Point of View

A Provanta client had a large principle balance of $14,772.00 on a major credit card , to which an additional $5,258.49 was added in interest and late fees for a total of $20,030.49.

The client had a good amount of funds available for settlement, but over three months, she could only provide $5,030 which is 25.11% of the total balance with interest.  Working together, the Provanta negotiator and the agent devised that they should present the offer as a percentage of the principle, rather than the total balance.

When the agent presented the offer to his client as writing off the interest and then collecting 34% of the principle, they agreed. This client saved $15,000.49 because our negotiators and the agent didn’t get hung up on the interest and fees, which, after all, are arbitrary.

(Ref. 1532)

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Slow and Steady

A client in Provanta’s debt settlement program has had sufficient funds for a settlement on one of her accounts with a balance of $1,237.52 since March of this year. Provanta negotiators had been telling them so.

The agents at a collection agency responded to our offer of $401 with offers all over the map, from $932 at the highest to $507 at the lowest.  Though it was tempting to give in at times, especially with the low counter offer of $507, Provanta negotiators held firm and kept working the hardship.  The client, for her part, firmly stonewalled any attempts the collector may have made to speak to her directly.  Though it took four months, we settled for 32.4% of the current balance and saved the client $836.52.

Slow and steady will sometimes truly win the race!

(Ref. 1531)

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Weekly Debt Free Clients

Total Debt Free Clients July 14 - July 18

• Total Clients Debt Free - 3
• Total Debt Settled - $101,856
• Settlement Amount - $41,743
• Savings - $60,113
• Average Percentage of Settlements - 39%
• Average Program Length - 52 months
• Shortest Program Term - 37 months
• Longest Program Term - 63 months
• Best Overall Settlement Percentage - 34%
• Worst Overall Settlement Percentage - 44%

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Weekly Settlement Statistics

Total for the week of July 14-July 18, 2008:

• Total Debt Settled - $116,038
• Total Settlement Amount - $53,671
• Settlement Percentage - 46.3%
• Total Cases Settled - 27

Best Settlement:

• Current Claim - $8,915
• Settlement Amount - $1,700
• Percentage - 19.1% (negotiated with a original creditor)

Worst Settlement:

• Current Claim - $3,542
• Settlement Amount - $2,500
• Percentage - 70.6% (negotiated with an original creditor)

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Living Beyond Your Means?

A great article was published via Yahoo! Finance on Monday titled “Five Signs That You Are Living Beyond Your Means”.  This article stresses several key factors that many struggling with debt are acutely aware of:

1. Your Credit Score is Below 600
2. You are Saving Less than 5%
3. Your Credit Card Balances are Rising
4. More than 28% of Income Goes To Your House
5. Your Bills are Spiraling Out of Control

What struck me more than any of the other statistics quoted in the article was that the personal savings rate has severely deteriorated over the past couple years.  The following chart was provided based on data from the U.S. Bureau of Economic Analysis.

For the full article provided by Investopedia on Yahoo! Finance click here.

Technorati Tags: personal savings rate, debt settlement, budgeting, economics

Patience and Persistence

A Provanta Debt Settlement client had an major credit card account with a large balance ($10,214.13) and was concerned he’d be vulnerable to a lawsuit because he was a homeowner.  Three months ago, client indicated that he’d be happy to settle for slightly above our guideline as long as it could be done quickly, and provided some additional funds to help out.  Our negotiators responded with an even more intense effort, since the extra funds provided leverage for a quick settlement.

The collection agency in charge of the file was playing hard ball, though.  The first month they insisted upon 60% of the current balance.  Both Provanta and the client agreed that without an active litigation process, 60% was too much for a settlement.  Though it was difficult, the client agreed to wait it out.

The next two months were a series of back and forth moves, gradually eroding the agency down to 50%, and then 40%.  At the end of this period, the agency admitted that they had purchased the account from the original creditor.

If an agency owns the account, it means they only have themselves to satisfy.  No major banking client needs to be pleased; it is entirely up to them to recognize a good settlement when they see one.  The lead negotiator knew the jig was up and made it clear that no more than 30% of the current balance would be paid on the settlement.

After another several weeks of holding out for 40%, the agents announced on the morning of June 30th that under no circumstances would they accept 30% for a settlement.  By 3:30pm, they wanted that money and the following morning a settlement letter arrived stating that $3,000.00, or 29.37% of the balance, would be accepted.

Patience and persistence paid off.

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Turning The Tables

Many collection agents and creditors don’t like dealing with settlement companies.  We are just as persistent with calling and leaving messages for them as they are to debtors. After awhile, they’ll give up and speak to us, especially if they have no luck in contacting the debtor directly.

Last week, one of our negotiators was asked by a debt collector to please stop calling and harassing him…

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The Value of Professional Negotiators

One of the cornerstones of Provanta’s Debt Settlement process is the use of professional negotiators.  As professional negotiators, the settlement team is able to say no to a potential deal — in favor of the promise of a better one down the line much — more effectively than the debtor himself, who may feel guilt, pressure, remorse, or other emotions that cloud his judgment.

Besides objectivity, professional negotiators have the resource of numerous client cases that can be used as leverage, and as a bargaining tool. Having access to case histories allows Provanta negotiators to quickly evaluate a settlement proposal in comparision with other deals that have been made with that agency. It also allows Provanta negotiators to quickly pull up all the open files and use the information to broker multiple-case, large scale deals.

A mountain of debt is much less intimidating if you can hire professionals to move it for you.

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Getting Past the Fist Line of Defence

Provanta Debt Settlement negotiators receive hundreds of calls each month from creditors and collection agents.  Oftentimes, these front line agents have limited authorization to accept the low settlements that we achieve for our clients.

The agents who make the first call on a case are usually not the same people who make the decisions about accepting funds for settlement.  These agents are usually hemmed in by some sort of standardized speech about how if you don’t pay they may recommend litigation against you to their client, etc., etc.  Sometimes,  the first trick to getting a settlement is to make it past that first caller and speak to a supervisor, or at the very least, get that agent to pass your information along to a supervisor.

In one case, one of these agents contacted a Provanta negotiator, saying he was required to stick to a guideline of 50% of the current balance.  The negotiator wheedled and cajoled, until the agent agreed to submit her much lower offer of 30.99% of the current balance.  After a few minutes, the agent returned to the line to announce that 30.99% was an acceptable settlement and the client saved $2,082.05!

Even if a negotiator doesn’t get a settlement on the first call, it’s a mini-victory if the agent agrees to submit the offer for manager review.

(Ref. 1529)

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Weekly Debt Free Clients

Total Debt Free Clients July 7 - July 11

• Total Clients Debt Free - 3
• Total Debt Settled - $63,842
• Settlement Amount - $24,684
• Savings - $39,158
• Average percentage of Settlements - 41%
• Average Program Length - 49 months
• Shortest Program Term - 36 months
• Longest Program Term - 57 months

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Term Settlements

Oftentimes, Provanta Debt Settlement negotiators are able to reach a settlement on an account with term payments.  Mostly, these types of settlements are paid in four months or less.

Recently, more so than before, agents are making settlement offers and extending the offer out to as many as sixteen payments.  Less than a year ago it was difficult — but possible — to get an agent to extend an settlement out four months.  Now they’re offering six, twelve and as much as sixteen month arrangements.  While this shows us the agents have came to terms with the benefit of debt settlement, this is not particularly beneficial to our clients. The future is unpredictable, and to make a commitment that extends out more than four months is setting our clients up for failure.  The gesture is appreciated, but not particularly useful — though it does come with a general flexibility that’s far easier to work with.

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Weekly Settlement Statistics

Total for the week of July 7-July 11, 2008:

• Total Debt Settled - $129,237
• Total Settlement Amount - $62,300
• Settlement Percentage - 48.2%
• Total Cases Settled - 25

Best Settlement:

• Current Claim - $7,576
• Settlement Amount - $2,107
• Percentage - 27.8% (negotiated with a original creditor)

Worst Settlement:

• Current Claim - $3,080
• Settlement Amount - $2,330
• Percentage - 75.6% (negotiated with an original creditor)

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Commitment

One size does not fit all.  Everyone suffers from unique symptoms that require an individualized remedy.  Regardless of the plan of action to eliminate debt, it takes a high level of commitment.

If you have ever worked with a fitness/athletic trainer you know this to be true.  Any trainer worth their salt will tell you that in order to see results, long-term commitment is needed.  Results simply don’t happen overnight.  The same applies to any plan chosen to eliminate one’s debt.  Too often those struggling with debt assume that there is a magic bullet that will somehow fix all of their problems.

Whether one decides on a debt settlement program, consumer credit counseling, a home equity line of credit (HELOC), bankruptcy, or simply to pay off the debt on their own, one must be fully ready to COMMIT.  Success, in any area of life, requires a high level of perseverance and commitment.  This is especially true as it pertains to one’s finances.

If you are struggling with debt take a few moments to think about how long it took you to accrue the debt.  It is important to realize that any plan to eliminate the debt, no matter how carefully thought out, is most likely going to take several years to execute.  Once you have made that decision to live cash only and live a life free of debt take a deep breath.  This is going to be an endurance run and not a sprint.  Focus in on the finish line with the unwavering eye of an Olympian and don’t quit until the last penny of your debt has been taken care of.

Many have traveled this path before and rest assured that you are not alone in your quest.  For words of encouragement and ideas please read other blog postings on this site or give us a call to discuss your options.

Technorati Tags: debt forgiveness, debt settlement, debt relief options, cccs, consumer credit counseling, home equity line of credit, heloc, debt consolidation, bankruptcy

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