Mei Ho
Mei has been with Provanta Corporation for over 3 years ago. She is involved in many of the departments including Sales, Program Management and Settlement. Before Provanta she was in the financial planning industry focusing primarily in insurance and retirement plans.

mho@provanta.com

The Importance of Commitment

After 33 months of being in Provanta’s Debt Settlement Program, one of clients is finally able to be free of his credit card debt.

Our client’s original estimated program term was 29 months.  However, he continued to struggle with his income and expenses after enrollment.  Six of his regularly scheduled monthly deposits were returned as non-sufficient funds (NSF) by his bank.  He has also made special requests to skip or reduce his deposits on 3 other occasions.

We take these types of problems very seriously.  If a client continues to demonstrate an inability to make his monthly deposits as scheduled, we may consider closing the client’s debt settlement program.  This is not to be inconsiderate or unsympathetic to our client’s on going financial problems but to encourage them to look for different options that may suit them better.  Our debt settlement program simply cannot be effective if the client cannot afford it.

We never had to consider closing this particular client’s program despite some of his financial problems.  He was always in communication with us immediately whenever there was a issue.  He made efforts to make up the NSFs or skipped deposits.  He was honest about his situation and he understood why this was a serious matter.  He made all efforts necessary to continue with the program and we stayed committed to help him and to make necessary adjustments to our settlement strategy to accommodate his situation.

In the end, his program term extended only 4 months longer than originally anticipated and we were able to settle his accounts for 41% of the total balance owed.

Ref. 1539

Another Debt Free Client

A middle aged couple from the Northeast recently completed their debt settlement program with Provanta.  They enrolled 10 accounts in the program.  Nine of those account were settled for a total of 40% of the current balance (51% of the original balance).  Great settlements overall.

One account was not settled because the account could not be located.  When we contacted the credit card company, we were told that they had no record of the account.  We asked our client to obtain their free credit report so that we could review it.  It turns out the account could not be found on the credit report either.  This is rare but we come across these situations from time to time.  There are several possible explanations.  Perhaps the credit card company simply made internal errors and erased all record of the account.  Maybe the credit card company has simply let the account slip through the cracks and they don’t want to bother with it anymore.  It may even be possible that the account may resurface in the future.  In any case, the clients decided to simply close the account since no one was collecting on it any more.

Our client can move forward with their credit card debt-free life with confidence that if the account ever resurfaces in the future, they can come back to Provanta and we will help them resolve it.

Ref. 1537

Capital One Collection Complaint Resolved

For approximately a year now, the U. S. Department of Justice has been investigating and working with Capital One to resolve complaints that the credit card company has been collecting on debt that was no longer owed to them.  According to articles on both the Wall Street Journal website and Forbes.com, Capital One has sought and collected on debts that had previously been discharged in bankruptcy proceedings.

Reports say that Capital One has collected approximately $340,000 and the company will be working with the Department to return the money.  An independent auditor will be hired to review over 650,000 Capital One customer accounts to look for any other monies collected in error.

It is great that the Department has gotten involved and that Capital One has been cooperative, open and willing to resolve this problem as quickly as possible.  However, I imagine that for a lot of individuals who unknowingly paid debts they shouldn’t have had to pay, this caused a huge financial burden.  It is always important that everyone understands their consumer rights and the laws that regulate collection practices.   For more information on this topic, I suggest visiting the following sites:

Federal Trade Commission

Wall Street Journal

Forbes

Patience

All of our clients are aware that some creditors may still pursue legal action to collect on debt owed even though our clients have enrolled in Provanta’s Debt Settlement Program.  However, that does not make a creditor’s lawsuit any easier to deal with  In fact, some of our past clients have decided to withdraw and look for other options when litigation began.

I can’t say I blame our clients for making that choice.  Knowing something might happen and then actually experiencing it are two completely different things.  The latter can be extremely unpleasant.

Despite the creditors choice to litigate, we always encourage our clients to stay with the program and reach their ultimate goal of becoming debt free.  We provide support and guidance to help them through the unfortunate situation.  We explain that although one creditor may have filed a lawsuit, it does not mean others will.  More importantly, we continue to negotiate for settlements on accounts even if the accounts are in litigation or have judgments.  Settlements may still be reached in these situations.

For example, a client who recently graduated from Provanta’s Debt Settlement Program started the program with 7 accounts.  In 2006, one of her creditors decided to file a lawsuit and obtained a judgment against our client for a balance of $8100.  We had already settled 3 accounts for her and she had 4 accounts left including the judgment account.

Though she was distraught over her situation, she decided to stick to her original plan- to complete Provanta’s Debt Settlement Program and resolve her unsecured accounts.  We continued negotiations with the remaining creditors.  About a year later, in the spring of 2007, the creditor who filed a lawsuit finally realized our client would not be able to pay the judgment.  They offered to settle the account for $5698.  This was a good offer considering our client’s situation so we helped her take advantage of it.

Even though this particular account settled for 70% of the balance, the overall settlement percentage for our client at the end of her program was 42%.

(Ref. 1536)

Technorati Tags: debt collection lawsuit

Continuing Support for Clients

Last month a client contacted us and asked if we could add his wife and her accounts to his current debt settlement program.

The client had enrolled in our debt settlement program earlier this year.  He and his wife had always kept their credit cards separate so his wife was not required to join the program although we highly recommended that she did.   Our client has been battling cancer for the past five years, had brain surgery to remove a tumor and only received disability income since he can no longer work.  They had an extreme medical and financial  hardship which made our debt settlement services suitable for both of them.  However, our client was hopeful that if we could help him with his accounts, they would be able to manage his wife’s debt on their own.  They wanted to try to maintain her credit rating as well as have access to a credit card in case of emergencies.

Seven months later, I am working with the wife to add her accounts to his program.  Although they have tried to keep up with her bills during this time, their situation has worsened.  She fell behind on payments a few months ago and have not been able to catch up since.  She has gone through some personal medical problems, have had surgeries and missed a lot of work.  The emotional stress of dealing with financial and medical problems escalated into a deep depression for our client’s wife.   On top of this, our client’s cancer, which had been in remission for a little while, has come back.  He will start chemotherapy next month.

I was extremely sad to hear that our client’s situation has gotten to this point.  While I am glad they decided to enroll her accounts, I wish their decision was motivated by different circumstances.   Our services will not be able to help them with the medical struggles they’ll soon be facing but we can help alleviate some of their current financial burdens.

(Ref. 1535)

Technorati Tags: debt settlement, financial hardship, medical hardship

Growing Debt Among Retirees

Even though financial hardships come in many different forms, there have been certain recurring themes — such as medical hardships or job loss — that have made up the majority of clients who have sought out Provanta’s professional services.  More recently, there seems to be a growing trend toward another type of hardship: retirement.  

Retirement was once something people looked forward to as the great reward after years of hardwork.  So how is it that retirement is now becoming a financial hardship?  The title of an article that can be found on http://www.msnbc.msn.com/id/23484918 it all — “2008 retirees need $225,000 for health care.” 

Our client has been collecting social security and disability income since 2001.   In the past 7 years, our client has needed 10 surgeries.  In March of 2006 he was returning home from a post surgery check-up and was involved in a very bad car accident.  The accident caused a hernia at the site of the surgery that also resulted in severe neck and lower back trauma.  Our client has required further treatment and surgeries to address these complications.  The other driver’s car insurance company accepted responsibility for the accident but did not accept the fact that the medical condition and treatment resulted from the surgery.  As a result,  our client used the credit cards to supplement his income and pay for out of pocket medical bills.

(Ref.1528)

Technorati Tags: retirement financial hardship, medical hardship, health care costs, retiree debt

June’s Debt Free Clients

In June Provanta helped 28 clients complete their debt settlement program.  This is the highest number of completed programs in a single month all year. 

This group included people from California all the way to New York.  Some of these individuals are single and some are married and raising a family.  One couple is helping their young daughter raise her young child as a single mom.  A few from this group have on going medical illnesses that they still have to manage in the future. 

Regardless of the different backgrounds, this group has one common reason to celebrate- they have completed their debt settlement program and are now debt free!    

Technorati Tags: debt settlement, debt free

Debt Minimum for Qualification

The average Provanta client enrolls approximately $30,000 of unsecured debt (mostly credit card) in our program.  Since most news reports state that the average American carries $8-$10K of debt, it’s understandable why someone with $30K of debt would need our help.  The discrepancy between what the average American owes and what our clients owe can also give our negotiators some advantage in the debt negotiation process.  The creditors and their collection agencies have more reason to accept our client’s financial hardship and work out a reasonable settlement arrangement.

But what about our other clients- the ones who owe a total of $5K, $10K or even $12K?  They’re not that far off from the average American so is it right for Provanta to help these clients resolve their accounts through our debt settlement process?  If so, is their situation more difficult for our negotiators since we may not be able to use some of the same arguments mentioned above?  Let me use the hardship of a newly enrolled client to address these questions:

Most of this person’s debt accumulated over the past three years.  He has been with his employer for over three years and has received consistent income.  However, just prior to securing this position, he was laid off for about five months.  He requires medication for high cholesterol, diabetes, and depression.  He is also paying for a breathing machine for sleep apnea.  At one time, he was paying over $300 a month in out of pocket medical expenses.  This has been reduced but it has not made things any easier.  The credit cards were used primarily for living expenses over the past couple of years.  More recently, it has become impossible for him to keep up with the minimum payments.  He cannot get ahead and elminate the debt on his own. 

Our client owes $11,000 in debt.  Although he may just be a tad above the average, his situation is anything but average.  He qualifies for our program because of his medical and financial hardship.  Our negotiators can use this information to effectively negotiate settlements regardless of whether his debt is above or below the average American’s.   

Although we may not be able to help everyone, Provanta will consider everyone’s situation to determine if debt settlement is the right option for them.  We do this regardless of the debt amount so long as the person is truly struggling. 

(Ref. 1526)

Technorati Tags: debt hardship, medical hardship, financial hardship, average American debt

Make Him an Offer He Can’t Refuse

On June 4th, one of our negotiators received an unexpected call from a collection agent. This agent wanted to make an offer to Provanta for a relatively new client.  Since the client was so new, he was just starting to  to accumulate funds in a savings account that was reserved for his debt settlement program.  The current balance on the account was $11,536, our client’s highest account, and he only had $250 in his savings account.

Our negotiator didn’t know what the offer was going to but expected it to be high.  She was prepared to decline the offer and explain it was too simply too high and unreasonable, our client had a valid financial hardship, etc, when the agent made an unexpected offer that we simply could not refuse (at least not right away).  The agent said the account can be settled for $1200 (10% of what was actually owed!).   It was simply too good for us to turn away without serious consideration.

We immediately contacted the client, who was just as excited as we were.  We discussed his options and helped him brainstom the different ways for him to come up with the money.  The creditor agreed to accept the $1200 settlement in 3 payments over 3 months which will make it easier for our client to accomodate.

(Ref.1525)

Technorati Tags: debt settlement results, debt settlement percentages, debt settlement offers, debt negotiation process

Stubborn Creditors

Our debt settlement programs average 36 months from start to finish but we have some clients who are enrolled for a longer time.  Longer than average programs may happen for a variety of reasons.  It can occur when a client skips or reduces his regularly scheduled monthly deposits for the program (often during times of job loss, unexpected expenses, accidents, etc), when difficult litigation situations arise, or when changes occur in a credit card company’s policy.

In one particular client’s situation, he actually had 13 of his scheduled monthly deposits skipped or returned to Provanta as NSFs (non sufficient funds), which was likely the main cause of his program extending to 5 years.  In addition to his long program, Provanta was unable to settle his final account.  The reason for this has less do with the NSFs, however, and more to do with the creditor’s stubbornness.

When the client enrolled, he provided information to Provanta showing that he owed $4,600 to this creditor.   Whenever the creditor responded to our attempts to negotiate, they would make an extremely high settlement demand such as $5,900 or $6,700.  Since the creditor continued to be unreasonable, Provanta focused our efforts to settle accounts with the other creditors who were willing to work out a resolution to the account.

The other accounts settled for a gross total of 46 cents on the dollar while this creditor continued to decline our settlement offers.  We eventually referred the client to an attorney in order to investigate whether his account may have reached the statute of limitations, which would mean the creditor could be unable to pursue legal action as an option to collect the debt.

Despite this, the client asked us to continue negotiations.  He still wanted to resolve the account and pay the creditor as much as he could.  After explaining that the client may have reached the statute of limitations, the creditor still refused to settle the account for a reasonable amount, “reasonable” being an amount that contemplates the statute of limitations possibility.  Keep in mind that this creditor had not received payment on the account for 5 years and would unlikely be able to collect from this client in the future.  In the end, our client decided to officially withdraw and we ensured that the bank holding the funds he reserved to settle the last account returned those funds to him.  This money could have been used to pay the creditor, but since they insisted on taking $0 over a period of five years of offers, our client will likely use these funds elsewhere.

(Ref. 1524)

Technorati Tags: debt settlement, statute of limitations on debts, debt negotiation

Client Withdrawals

On May 19th, I wrote about our client’s experience with a creditor who was threatening to sue our client even though Provanta had legitimately settled the account, received a settlement agreement letter, and made the settlement payment to the collection agency.  After 6 months of hard work and persistence, we got the law office to accept the original settlement agreement and cease any further legal action against our clients.

I have another conclusion to this story.  The clients decided to withdraw from Provanta shortly after the situation was resolved.  They do not blame Provanta for the situation because they know we did everything by the book.  They understand that the situation would not have occured in first place had it not been for poor miscommunication between the collection agency, creditor and law firm.  However, they are simply upset that the situation occurred at all.  They are disgusted with the complications that can arise when someone (in this case the collection agency) fails to do their part in the debt settlement process. 

We had settled a total of 5 out of their 10 accounts even though the clients had only been enrolled for 14 months.  The current claim of these accounts were $42,798.81 and they were settled for $18,760.35- the clients received a gross savings of 56%.  Even though the clients still have approximately $21,700 in debt left to be resolved and we’ve provided excellent settlements so far, they decided to try to make payment arrangements with the remainning creditors for balance in full.  They know that this will likely cost them more financially and that it can take a much longer to resolve the accounts but they are willing to take that risk instead of the risk of the above mentioned incident occurring again.       

It’s always difficult for Provanta to see a client withdraw before we complete their program. We understand that circumstances change and sometimes a client may need to withdraw because of a job loss or increased medical problems.  For this particular client it’s more difficult because their withdrawal resulted from a collection agency’s mistake and refusal to admit their error, which led to the drawn out and unnecessary process to correct the error.  We do however respect our client’s honesty and decision and wish them nothing but the best.    

(Ref. 1523)

Technorati Tags: debt settlement results, debt settlement litigation, collection attorney, debt settlement process

38 Months to Freedom From Debt

A young couple, Provanta clients, just received some very good news from us.  Not only did we just settle an account for them, it was the last account on their program.  In approximately 38 months, we were able to settle all 9 of the accounts they enrolled and they are debt free.

Our clients had a financial hardship when they first enrolled.  For over a year and a half, the husband worked for the military and he was relocated to Hawaii, so he and his wife were separated for quite awhile.  When he finally switched jobs to be back at home, he worked for a year and then suddenly, he was laid off.  He was still collecting unemployment by the time he and his wife had their first child.  His wife was also not working and collecting disability.  They were new parents, unemployed, and struggling with medical bills when they contacted Provanta.

Their financial hardship actually worsened during our program.  While the wife was pregnant with their second child, she was in a serious car accident.  The car was totaled but luckily, both the unborn child and mother were going to be okay.  Provanta worked closely with the clients to help them maintain their program despite the unexpected and scary experience.  We made adjustments to their program and to our negotiation strategies to accommodate their new situation.

Though their program took 38 months instead of 36, as originally estimated, our clients are thrilled to finally be able to put all of this behind them and concentrate on raising their children.  In addition, since they referred someone they knew to our debt settlement program, we offered the clients the option of receiving $595 cash or $1000 credit toward their final Provanta fees, simply as a thank you for helping someone they know become debt free through our program.  They opted for the credit so not only did we settle their last account for them, we paid the fees associated with it.  They are very happy.

(Ref.1519)

Technorati Tags: debt relief story, debt hardship, debt management program estimates, debt management referral program, debt settlement results

Outrageous FDCPA Violation

As I was reading an article about a $200 million lawsuit that the FTC and FDIC are jointly trying to file against a major, publicly traded credit card marketer and its debt collection agency for deceptive marketing and numerous FDCPA violations, a Program Manager popped her head in my office to let me know that a collection agency is calling our client’s neighbors and leaving notes on the neighbor’s door about our client.

I am amazed.  The above referenced companies are facing a $200 million lawsuit for FDCPA violations.   The FTC reported in it’s Annual Report 2008: Fair Debt Collection Practices Act that in November 2007, the FTC won a lawsuit against another collection agency for misleading, threatening and harassing consumers.  This collection agency was ordered to pay over $1.3 million in fines to settle the case.  A popular political topic in this year’s presidential campaign has been the credit card industry and America’s growing debt problem.  With all of  this going on, I am amazed that there are still some credit card companies and collection agencies with the audacity to so blatantly violate our client’s basic consumer rights and not think twice about it.  Did they not get the memo on what’s going on, or do they simply think they are above the law?

Well, be assured that we are working very closely with the client to help her through this troubling incident.  She is just as angry as we are about the situation and she plans to file an official claim with the FTC against the collection agency.  I hope that others who have had such an awful experience will do the same so that FDCPA violators can be penalized for their behavior.

(Ref. 1518)

Technorati Tags: FDCPA violation, creditor harassment, FTC debt collection complaint, collection agency abuse

When I Grow Up I Want to be in Debt

Does that line sound familiar?  Of course not.  Kids grow up saying things like they want to be a doctor, an astronaut, or a zoo keeper.   No one grows up saying they want to be in debt one day, so why is it that Americans have a combined credit card debt of over $900 billion? 

There are many theories and possible explanations that all have some truth behind them.  One possibility is that most people have simply forgotten the basics of sound financial planning.  Traditional financial planners will tell you that you need to have a reserve emergency fund with enough cash to last you at least six months should something unexpected occur, such as job loss.  If your emergency lasts longer than six months then maybe, just maybe, you will use the little piece of plastic to buy food or pay for utilities-just the absolute bare necessities.  Once you are back on track you do all that you can to rebuild that emergency fund, pay off that credit card, and then put the credit card away so that it will be used only in the next dire emergency.  Yes, this may mean some months of clipping coupons and postponing that vacation, but that is what being financially responsible is all about.   

That was then; this is now.  Credit cards are no longer used just for emergencies.  They are used every day to pay for everything from utility bills and groceries to shoes and vacations.  So how did this happen?  Well, first there’s the convenience factor.  Carrying a credit card is definitely easier than carrying a wad of cash in your wallet.  It makes your purse a little lighter and if your purse gets stolen, you can cancel your credit cards. Cash, on the other hand, cannot be canceled and issued to you again.  Convenience is great.

Second, once you get accustomed to using credit cards to purchase daily needs, the line of demarcation between necessity and want blurs.  For example, food is a necessity.  A $100 per person dinner at the new trendy restaurant is a want.  A credit card can marry the two, such that you can satisfy your basic need and your desire at the same time.  Since credit card use has become a habit, the $100 dinners continue and then voila, and 3 years later you’re still paying for that dinner.  This is great…well, not really.

Does this mean that I believe everyone in debt is in their situation because of poor money management, distaste for cash, and lack of self discipline?  No, of course not.  As I mentioned above, there is not one single answer to explain all of this; rather, there are many factors fueling America’s growing debt problem, including the job market, legislation and credit card companies themselves.   However, I think that if Americans are to start trying to resolve this problem, and more importantly, teach our kids how to avoid putting themselves in this same situation, we all need to go back to the basics of sound financial planning and responsible credit card use as soon as possible. 

Technorati Tags: budgeting, debt problems, American personal debt, financial planning, credit card debt

An Early Victory for a New Client

Last week we settled an account for a client who just enrolled at the end of April.  Our client signed the Limited Power of Attorney we provided in his Enrollment Application, as all of our clients are required to do, which authorized Provanta to negotiate debt settlements on his behalf.  We had to send the creditor a copy of the Limited Power of Attorney three times in May before the creditor finally acknowledged that we had proper authorization to speak on behalf of our client regarding this account.

In a different letter we faxed to the creditor office in June, we offered to settle the $8747 account for $2625. A Provanta negotiator contacted an agent at the office to follow up on our offer. The agent said that his manager was reviewing it and would get back to us. Two days letter, they accepted the offer. The account was settled at 30% of the original claim.

This settlement was possible at this early stage of our client’s program because our client had provided a substantial lump sum for the program up front. He was recently laid off and although he will be receiving unemployment, he knew he would not be able to keep up with his minimum payments. With unemployment on the rise nationwide, our client knew he had to find a solution to his debt as soon as possible just in case he could not find a job within a reasonable time frame. He decided to liquidate a significant amount of his savings so that he could offer it as settlements to his creditors through our program. He decided to do this before he even contacted Provanta.

Whether to use savings, investments and/or retirement funds to expedite the debt settlement process is always completely up to our clients. There can be benefits to doing so such as shorter programs, litigation avoidance, lower monthly EFTs, etc, but there can also be some risks as well such as a smaller emergency reserve or a postponed long term goal such as a house or retirement. This is why our Program Managers are always available to speak to any client who is debating such an issue.

(Ref. 1515)

Technorati Tags: debt settlement, debt settlement percentage, unemployment, financial hardship

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