Provanta
The Importance of Commitment
October 15, 2008
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
October 9, 2008
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
October 9, 2008
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:
Patience
October 2, 2008
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)
Continuing Support for Clients
October 1, 2008
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)
Growing Debt Among Retirees
July 3, 2008
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)
June’s Debt Free Clients
July 2, 2008
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!
Debt Minimum for Qualification
June 24, 2008
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)
Make Him an Offer He Can’t Refuse
June 23, 2008
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)
Stubborn Creditors
June 20, 2008
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)