Debt Settlement Programs Can’t Help Everyone
May 23, 2008 · Print This Article
Most companies in the service industry are focused on enrolling as many clients as they can. Provanta is no different, but we do have to decline requests for enrollment from time to time if debt settlement simply is not a viable option for them.
A woman who was referred to Provanta through the local Better Business Bureau (who has been kind enough to refer a number of clients) walked into our office last week and asked to speak to someone about our program. Luckily, I was available to speak with her. We spent about 45 minutes talking about our services. I provided her an estimate for her program based on her current statements. She said enthusiastically that she wanted to enroll into the program because it would help her financial situation and she felt comfortable with our approach and background. We set up an appointment two days later for her to come back and complete an enrollment application. I asked her to bring along some other documents including a pay stub and a list of all her monthly expenses.
During the appointment, I realized she only made about $2,600 a month after taxes but her monthly expenses with her mortgage, car payments, medical bills, food costs, etc totaled over $4,500. She was upside down nearly $2,000 per month. There was no financial way she could afford her current expenses let alone the additional $1000 she would need to provide for the debt settlement program — she owed $58,000 on credit cards. Even if she was able to eliminate her mortgage and her car payments tomorrow, she still could not afford the program. It was difficult for her to accept. She asked me to ignore her income and she asked if I coud even lie about her income to our underwriters. She insisted that she would find a way afford the program and she would make it happen.
I had to be firm with her and explained that it was simply irresponsible and unethical for Provanta to enroll her. She had over extended herself long ago because of poor budgeting and because her creditors allowed it to happen. Her creditors should not have extended over $50,000 of credit on credit cards to someone who only makes $2,600 a month and she should not have been able to purchase a home where the mortgage payment accounts for more than half of her monthly disposable income. It’s unfortunate for her, but she’s at a point where it’s unlikely any debt program could help her. She asked about bankruptcy and I told her that it may be worthwhile for her to consult with an attorney specialist.
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Technorati Tags: bankruptcy, debt settlement, BBB, Better Business Bureau, debt settlement underwriting, bankruptcy attorney
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