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This set of Frequently Asked Questions was obtained from http://www.provantacorp.com/faq.htm ad is posted here for research purposes only. This website has no connection with Provanta Corporation.

The webmaster's comments are in italics.


Do I qualify for your debt settlement program?

To qualify you should have $10,000 or more in unsecured debt. Your monthly payments need not be delinquent already, however you must have a true financial hardship that makes your debt beyond your means to repay.

While a debt settlement program payment is often less than your monthly credit card payments, you still need to demonstrate the capacity to make at least the monthly program payments.

Debt settlement is not for everyone. It requires a solid commitment to becoming debt free because a typical program can take from one to three years to complete. A free, confidential conversation with one of our specialists will help you quickly determine if debt settlement is right for you. Call us at 800-794-9700 or Click http://www.provantacorp.com/getstarted.jsp to register on our website, and we will contact you.

Does that mean it's right for you or right for them? They don't want smaller amounts because smaller amounts of debt don't generate what they consider to be sufficient fees.

Should I continue making my credit card payments while I am in your debt settlement program?

The Provanta debt settlement program has no requirements concerning whether you continue or cease making your monthly credit card payments. The choice is solely your decision.

Many, if not most, people do stop making their credit card payments when they enter a debt settlement program. This is most likely because their financial hardships require it. Beyond that a question worth considering is whether creditors will doubt there is really a financial hardship to justify settling a debt if they are receiving at least minimum payments every month.

How long will it take to complete the Provanta Debt Settlement program?

Typically our clients can complete the program in one to three years. The actual length of your particular program will be largely dependent upon the amount of your debts, the amount of your monthly program payment, and whether you are able to deposit any funds to your program beyond the monthly payments. Additional deposits are not necessary, although they do tend to accelerate the completion of a program. We would be pleased to provide you a free consultation to discuss your circumstances and determine what would be a feasible program for you with an affordable payment within your means.

What does it cost?

The cost of our debt settlement program includes payments to creditors to liquidate your debt, payments to Provanta, and bank fees for your settlement savings account. On average over the course of their programs most clients will pay a total cost between 50% and 70% of their original debt as of the time they enroll in our program.

The actual cost of your program can be influenced by a variety of factors, such as your particular creditors, the concentration of debt with given creditors, the degree of delinquency in your payments when you enroll in our program, the monthly amount you are able to deposit in your settlement savings account, etc. If you call us for a free consultation appointment, we will explain how these factors apply in your specific circumstances. You can reach us toll free at 800-794-9700

What is the difference between unsecured debt and secured debt?

The creditor of an unsecured debt relies only upon your promise to repay and that of any co-borrowers and/or co-signers you might have. The most common types of unsecured debts are credit cards, department-store cards, medical bills, and personal (signature) loans. The creditor of a secured debt relies upon collateral or security for a secondary source of repayment if you fail to repay. The most common forms of secured loans are home loans, such as first mortgages, 2nd notes and equity lines-of-credit, car loans, boats, and RVs. Once default takes place, the creditor's recourse is usually to foreclose on a home, or repossess a vehicle. A kind of quasi "secured" loan is a student loan. It is really a "guaranteed" loan, but the guarantor is usually the State or Federal Government. Because the lenders can get guaranteed repayment, they will not negotiate the settlement of student loans.

What kind of debts can't be settled?

Secured debts and guaranteed debts cannot be settled. The reason for this is that creditors who are secured or guaranteed lack any motivation to settle debts for less than 100 cents on the dollar. If a debtor defaults, the secured lender expects to recover the full amount due by seizing and selling the collateral that secured the loan. If there is a shortfall the remaining amount due becomes unsecured debt, which most lenders will then negotiate to settle e.g., an automobile is repossessed but cannot be resold for the full loan amount due, creating a deficiency balance that is unsecured. If a debtor defaults, a guaranteed lender looks to the guarantor to repay the outstanding balance in full e.g., student loans and the Federal Government, auto loans with a cosigner, SBA business loans and the Small Business Administration.

Will I continue receiving calls and letters from collectors and my creditors?

Yes. However, the number usually declines over time. You can accelerate the change by referring all such communications to Provanta and by refusing to become engaged on phone calls from creditors and collectors. Dealing with them is our job as soon as you have enrolled in our program.

You have the legal right to tell creditors and collectors to stop contacting you. Most will simply comply with your demand. Some may not temporarily, but usually we can secure their cooperation by reminding them of their obligations.

Is this why you're hiring Provanta? It shouldn't be. You should be able to lay down the law to the bill collectors without hiring Provanta.

Do I have to include all of my debts in your program, or can I give you only the ones I want you to settle?

You will obtain the best results by including all of your unsecured debts in your program. Otherwise the creditors in your program will be reluctant to accept less than one hundred cents on the dollar if they see in your credit report that you are making current payments to any other creditor. The only exceptions to this would be if you are required by your employer to use a credit card for reimbursable business expenses, or if you must use a credit card to purchase raw materials in the operation of your business.

The more debt you have, the bigger Provanta's fees are. With self-serving statements like these, how can you know which of Provanta's statements to trust.

What if I am unable to make a debt settlement program payment when it is due?

Making timely payments is key to having a successful debt settlement program. However, we understand that unforeseen circumstances might occasionally interfere with your ability to make a payment for your debt settlement program when it is due. If you have a legitimate reason for delaying or missing a payment that is an exception and not a recurring expectation, we will do our best to accommodate you while we continue to work with your creditors toward settling your debts.

Will I be debt free when I finish your program?

All accounts in your program that we have settled for you will then have a zero balance, and you will be free of any further obligation to those creditors.

Will debt settlement resolve all of my accounts?

Usually, yes. But realize that debt settlement is a negotiation process, and the nature of negotiation is that both parties have options. Creditors have the option of not agreeing to a settlement. However, in our experience this would be relatively unusual because it is usually a better option for a Creditor to offer some alternative. We are confident of this because we have been conducting such negotiations for over a decade, for thousands of clients, tens of thousands of accounts, and millions of dollars of debt settled.

How about interest charges and late fees on my debts?

These charges will continue to accrue. However, we negotiate to settle not only the original principal amount of your debt but also any interest or penalties that may have accrued as well.

If my spouse or former spouse is named on some of my accounts must he/she be included in my program?

Ordinarily yes, if they want to avoid being pursued independently by your joint creditors when you enter a debt settlement program, because your creditors probably will not agree to release them, even if you are separated or divorced. Although this may sound like a difficult problem, usually we can work out a means to proceed with a debt settlement program and to accommodate both parties.

How will debt settlement affect my credit?

A credit score is composed of a number of factors. Payment history is one of them. If you have a history only of making timely payments before entering a debt settlement program, debt settlement most likely will affect your payment history adversely. Other factors beyond your payment history affect your credit score, as well. For a complete description of these you can click on this link: http://www.myfico.com/CreditEducation and you will be taken to the company that created and defines the current standard for consumer credit scoring.

Is this like debt consolidation?

No. Debt consolidation is merely converting several or all of your debts into a new single debt that represents the total of them all, which you still must repay. Debt consolidation loans ordinarily are secured by the borrower's home, so the net effect is to transform your unsecured loans into secured loans, thereby putting your home equity at risk. With debt settlement the credit card accounts are not repaid, they are settled, once and for all, and your home remains unencumbered.

Moreover, many people who consolidate debt often end up with double the amount of debt they began with because they use the newly available credit on their credit cards.

Debt consolidation may be a bad thing, but that certainly doesn't make Provanta's debt settlement program a good thing.

What about bankruptcy as an alternative?

Bankruptcy is the option of last resort. For this reason, it is not something that needs to be rushed into precipitously. Bankruptcy may not relieve all debts and it may require you to liquidate assets. Bankruptcy carries with it a significant social stigma, and its devastating effects on credit last up to 10 years or sometimes longer. Debt settlement is an alternative to bankruptcy.

It's not clear why you should let social stigma interfere with making a rational decision. Debt settlement isn't going to clear up all debts either. Certainly bankruptcy shouldn't be done lightly, but neither should signing on with Provanta's debt settlement program.

Why can't I negotiate the settlement of my debts myself?

You can, but probably not as effectively as experienced professionals who specialize in such negotiations. Furthermore, you will be at a distinct disadvantage negotiating against your creditors who definitely are represented by professionals who have nothing at risk. They will expect to do better facing you than facing us, and therefore are likely to demand more of you than they will accept in a negotiation with us.

If you use a little common sense, it can't hurt! Of course, Provanta wants to disempower you by telling you that you'll be beaten without their help. Even if Provanta really tends to negotiate a lower settlement amount, you may not be better off. For instance, if you negotiate settelement of a $1000 debt for $500, the cost to you is $500. If Provanta negotiates a settlement of the same debt for $350, you'll be responsible for paying Provanta a fee based on the $650 debt reduction. You may incur other fees, and you may incur higher income tax consequences. Beyond that, you are interested in making sure the debt is indicated on your credit record as "paid in full", while Provanta may actually have a disincentive for having your credit record marked "paid in full".

What is your guarantee?

We guarantee that your total debt settlement costs, including fees paid to us, will be less than the amount of your debts settled or we will refund the difference to you, up to 100% of the fees we have received.

In short, this is Provanta's statement to the effect that they may charge you up to 100% of any amount of debt reduction they have negotiated. If this happens, you're really worse off than before you signed on with Provanta.

Imagine you owed one creditor $2000, and Provanta settled $1000 of that debt at a cost to you of $1000. You're worse off than you were before, because you might have been able to settle the full $2000 debt for $1000. This is not a very comforting guarantee.


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