But while there's certainly no fault in having such feelings, are we really talking about solemn obligations? You know, like when you borrowed money from a parent or other relative and promised to repay it in a way tantamount to staking your life an reputation on it?

...And, it's very convenient for the credit card companies, mortgage companies and even Uncle Sam to have you feeling that way. Don't they kinda spin it with a tinge of moral guilt when the subject comes up? Perhaps not without reason. Over the decades, we in America have become a nation of debtors, by and large. In the simplest sense, taking on debt is essentially selling your future labor. There's nothing inherently wrong in that, just when it gets out of hand and one day you wake up to realize that you've sold your next 20-30 years of productive life right now. Worse, you may have already spent it and have nothing much to show for it except to sack yourself with a much higher moving bill once that time comes.

Yes, indeed it's true. We've come to the place that if everyone stopped paying, all at the same time, it would be like a run on the banks and everything would collapse. And yet, if you feel your own money in the bank is in jeopardy, are you going to let it sit there so that other depositors not as contentious as you get their money back?

Ah, so you don't have an obligation to let your money sit in a failing bank? You're simply exercising your contractual rights as a depositor: to make a withdrawal? Well how about a credit contract? Does it really say in any of your credit card agreements (I know: you've never read them and either have I; and this should be a clue) that you 'solemnly promise to repay, no matter what,' or anything of the kind?

Of course not. A credit contract, just as mortgage contract, assigns certain obligations to each party and correspondingly, rights to each party in the event of default. Although...I'll bet you'll find that if you do actually read your credit card contract that you have most of the obligations while they have most of the rights.

Well, that's fair, as they are the ones taking the first risk.

Ah, so they're taking a risk? Like in business? Like, businesses take calculated risks and they price their products and services accordingly, so that they can weather the risks and losses and still make a profit? Maybe that's why you get the introductory interest rate and after a while, notice you're paying15, 20, 30 percent and more...(we have seen as high as 35% rates at Provanta). ...I'm not even going to go into the charges & fees.

The mortgage contract is the best way to illustrate what's going on. It's a pretty simple contract, at base. You agree to take on the obligation to pay interest, some principal (normally; amortized over some period), property taxes and insurance while they take on the obligation to treat you as the actual owner right now (not like a rental or lease); and if you default, they have the right to undertake a legal procedure that culminates in them getting the property back. And in most States, they have no recourse against you no matter what happens.

But credit cards are unsecured. They can't come and take your entertainment system, bedroom set, or anything else, so it's just you against them.

That's why you paid the higher interest rates and that's why they'll deal. And they do deal.

Before I close, I'll reiterate the original point but restate it in other terms: it's just business. The credit card companies, as did every lender you ever had, was looking to make a profit on providing services to you. They stringently calculated, they wrote up long and complex contacts to protect their interests, and they have their legal rights, which they know backwards & forwards.

But I know. You feel as though it's you suffering and not them if you decide to undergo the relative gauntlet that is a debt-settlement program. Frankly, it's a tough row to hoe for some, piece of cake for others, and how that's going to go is really unpredictable. In settling tens of thousands of accounts for hundreds of millions of dollars for small businesses and ordinary folks over nearly two decades, I have yet to come up with any formula that gives me any confidence in uttering any prediction in any individual case. Sometimes, they're aggressive, often not. The job can almost always get done; it's the level of difficulty that's unpredictable.

I won't lie to you, but most Debt Settlement companies do, at least in their advertising. It could be easy. It could be very hard, but what do you see typically in the advertising? The honest truth is that it's up in the air. Which means: the banks are conducting their affairs as the businesspeople they are, adhering to a contract they wrote, you agreed to...and there's nothing moral or ethical involved.

It's just business.

You really can get out of debt and we at Provanta can help. We can do it all for you. We've been doing it for thousands of clients for just shy of two decades. I hope it's a walk in the park for you but until I get a crystal ball, I simply can't assure you of that. What I can assure is that every client who has followed our instructions as best they can, consistently, has ended up 2-4 years later debt free, and including our fees...far less than they signed up with, and that's discounting even the continuing interest, late fees, and other charges.

Figure out what you owe today, total. Take 60% of that, give or take 10%, divide that into monthly payments over 24-48 months, and if you can make that payment, my bet is you'll be debt free. How easy, stressful, or un-stressful it is in your individual case is simply up for grabs and there's no getting around that. I would love to whisper sweet nothings in your ear if just to comfort you that it'll be alright, but I can't. I don't know your tolerance and I don't know the bank's resolve in your particular caee. What I can do it put my professionals to work on your behalf and we will absolutely do our best. That, I can solemnly promise.

Are you aware that most Debt Settlement companies carry a "D" or an "F" rating, and that few are even accredited?

Recently, in an effort to give other Debt Settlement companies a chance at accreditation and a decent rating, the BBB at the national level pulled all ratings for all (including us, even though we've been "A" rated since 1994) and required that we comply with a multi-page set of operating standards, and that we supply documentation to substantiate our compliance with these standards. Fortunately, upon examination of the requirements, it was found that we had long been operating in compliance -- simply out of a sense of propriety, doing what's best for our clients and thinking in the long-term. As a result, we were quickly able to get our well-deserved "A" rating back.

Frankly, I don't now how all the other Debt Settlement companies out there rate in terms of the BBB, but you're certainly welcome to compare if you're interested in exploring your options.

With the Credit Card Debt Relief Act 2010, The Federal Trade Commission (FTC) passed new laws to regulate Debt Settlement Companies in an effort to weed out the unscrupulous and dishonest companies. With these new laws coming into effect October 27, 2010, what use to be viewed, as a risky option to resolve outstanding debt, is now looking more appealing as consumers are protected when it comes to Debt Settlement practices.

It is important to remember that despite the new laws going into effect next month, not all Debt Settlement companies are legitimate. When looking for a company, it is important to be able to differentiate between a reputable company and one that isn’t just out for your money. Be sure to ask questions about the company, its history, who its affiliated with and if they’re accredited with the Better Business Bureau (BBB). Be very cautious of any company that hasn’t been around for several years. A client’s program typically takes 3 years to complete and any company that hasn’t been around for at least 5-10 years, lack the experience needed to complete a successful program. Make sure the company is a member of TASC (The Association of Settlement Companies). The goal of TASC is to protect the interest of consumers by upholding and encouraging fair practices in the debt settlement industry. Also, stay clear of any Debt Settlement company that tells you they can stop creditor calls, freeze your interest rates or prevent litigation. No debt settlement company can completely stop the collection process, freeze your interest or guarantee that you will not be sued.

There are many other questions that you will most likely ask but the final decision is yours to make. Do the research on a company, ask plenty of questions and go with a company you are completely comfortable with. After all, this is your life.

On October 27, 2010 all debt settlements companies will be required to conform to the new rules of the FTC .

Following this policy, Provanta has a new program ready to start on October 1^st.  We see no benefit to either the consumer or Provanta to wait another month to bring our program into compliance with the new regulations.

As of October 1, 2010:

• There is no up front money paid to Provanta
• We have reduced our free from 20 to 15% of the total debt
• Fees are paid upon completion of each settlement
• Authorization of payment for all settlements by the client

Provanta is a leader in the debt settlement industry.  We have been in business since 1992.  With 17 years of experience behind us we have the expertise to help you become debt free.

For a free, no obligation consultation and quote, please call our toll free number.  Our case managers are waiting to help you become debt free.

For more information on the FDCPA and other money matters visit www.ftc.gov/moneymatters.

With the credit card reform act going into full effect by February of 2010 many credit card issuers are trying to extract as much money as they can from their credit card holders.  The new act will provide greater consumer protection against increases in rates and other payment provisions.  However, many believe that the new act is too little too late.

For more information visit CNNMoney.com or click to read “Credit card rates rise in 1st half of ’09: Group says bank profit from credit card debt rose as their costs to borrow money declined“.

I previously wrote about the Ten Questions to Ask When Evaluating a Debt Settlement Company.  Now, more than ever, it is critical that YOU ask these questions when seeking help from a qualified debt settlement company.  Do not take the word of the sales rep/debt consultant when calling a debt settlement company.  It will only take you a few minutes to do some research online to find out how long a company has been in business and what their Better Business Bureau rating is.

Remember that committing to a debt settlement program is a long-term relationship.  Avoid high pressure sales tactics and take your time in making a decision.

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.

]]> http://www.provanta.com/know-your-rights/feed/ 0 http://www.provanta.com/loan-modification-do-it-yourself/ http://www.provanta.com/loan-modification-do-it-yourself/#comments Thu, 16 Apr 2009 21:14:06 +0000 David McCullough http://www.provanta.com/?p=458 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.

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.