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Monthly Debt Free Clients

Total Debt Free Clients November, 2008

• Total Clients Debt Free -9
• Total Debt Settled – $204,645
• Settlement Amount – $129,733
• Savings – $74,912
• Average Percentage of Settlements – 58%
• Average Program Length – 42.56 months
• Best Settlement – 31%
• Worst Settlement – 79%

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Monthly Settlement Statistics

Monthly Settlement Statistics

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 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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What Are My Options

 

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An Introduction To Debt Settlement

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Outstanding Clients

Provanta negotiators were able to reach two settlement agreements for a particular client this month.  As with all settlements negotiated on behalf of clients, we must have approval from them in order to complete the settlement. Often, settlements have to be done quickly in order to close a deal, and it can be frustrating trying to reach the client for approval.

These dutiful clients responded within two hours, because they appreciated that when the settlement department gets in touch it is usually good (and time sensitive) news.  The First was a 40% settlement of $393.61 on a balance of $984.04.  The Second was also 40%, in which we’ll settle a $2,712.88 balance for $1,085.16.

Thanks to their diligence, they are two steps closer to getting out of debt.

Hardship

One of Provanta’s settlement negotiators received a call on a client’s behalf from a collection agency. This was on an account with an original balance of $1,406 in May of 2007 ( a year ago, as of this posting), and this balance — or, really: claim — has since grown to $2,050, an increase of 46%. The agency is now the successor in interest, i.e., they purchased the debt — likely for only a few cents on the dollar based on the 1400-figure.

Our negotiator informed the collector that another collection agency had already and recently accepted a settlement offer on another of the client’s accounts, and that no funds are currently available. This debt buyer adversary was none too please at receiving this information, and thereupon demanded that our client begin making minimum monthly payments. This is something we hear from collectors and creditors on a daily basis, of course. Our task, then, is to get them to understand that all of Provanta’s clients are in our program due to financial hardship and cannot commit to minimum monthly payments — promises they can’t keep — on all their obligations; i.e., settlement is the option they’ve chosen, and typically so over a quick and easy full discharge of all unsecured debt through bankruptcy proceedings.

Our negotiator then explained the client’s hardship to the collector, which is one of a common and typical nature for many of our clients. Many of our clients begin their financial decline through divorce, one or the other typically becoming responsible through court order for debt incurred within the marriage. This particular client owns no real estate, has no liquid assets, and owes in excess of $50,000 in delinquent, unsecured debt.

After the collector ran through the usual gamut of scare tactics, including commencing litigation (cheap threat: equivalent to a debtor threatening bankruptcy right out of the gate), our negotiator calmly explained that it’s going to cost her company far more in time and money to take a single mother of two to court than they will ever get back on a $2K account.

We’ll look to settle this account in the future, once sufficient funds have accumulated to make a non-insulting settlement offer.

(Ref. 1502)

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