Post Settlement Verification

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.

 

Collection Trickery

A collection agent called Provanta regarding a delinquent account with a current balance of $15,659.00.

The agent offer to settle for $7,047 and we countered with $5,353.00.  The agent declined our offer and demanded more funds, stating he had spoken to the client the night before and was informed there was $10,000 available for settlement.

Oddly enough, there had been approximately $10,000 available two months prior, however three accounts had settled leaving the $5353 available for negotiations.  We advised the agent of such and presented him with the same offer made previously.

Provanta also called the client to discuss the recent contact with the agent.  The client acknowledged that the agent did call and he referred him to us as previously instructed, but no discussion of funds had taken place.

The agent tried to pull a fast one on us but he was too slow this time.

Good Settlement

You never know when a creditor or collector is having a particularly bad month. We spoke to a collection agency regarding a clients accont on Monday 8/25/08.  Our negotiator made them on offer of $1,937 based on the funds we had available.  They turned their noses up at it.

They called back just two days later on 8/27/08, and with the end of the month looming, they accepted the settlement.  The clients saved $6,988 and we settled their account for just 21%.

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)

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)

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.

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…

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)

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.

Educating Collectors

A Provanta negotiator received a call regarding a five year delinquent account on a client that resides in California.

The original balance on this account was $15,744.00 and the current balance is $16,555.00.  Provanta made an offer for settlement in full at $4,723.20.  The collection agent counter offered at $10,761.00.

Our negotiator informed the agent that the client has a current debt load of $89,563.41, and $4,723.00 was all the funding available.  We informed the agent that this account was possibly past the statute of limitations, which in California is four years.  The agent’s response was “we know the account is past statue of limitations and that’s why we want to resolve it now, before it goes to litigation.”  In shock our negotiator gave the collector and brief layman’s education on statue of limitations. The collectors response then was, I will have my manager call you back in the morning to discuss the account.

Hopefully the manager will have more knowledge than the collector.

(Ref. 1527)

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