This article is for informational purposes and should not be construed as legal or financial advice.
ClearOne Advantage is one of the largest debt relief companies in the United States, but let’s consider the 8332 reviews about the company.
- What are the pros and cons of ClearOne Advantage?
- What is ClearOne Advantage?
- How much does it cost?
- How do the the reviews good compared to other debt relief providers?
Pros
1. How Much You Pay Each Month To Debt Could Go Way Down. Savings.
In simple terms, debt settlement allows you to pay less than the full amount you owe to your creditors. The exact amount of savings varies depending on the creditor, but it’s not uncommon to see savings of up to 50% or more. For example, if you have a massive debt of $50,000 in unsecured debt, a debt reduction company could negotiate with your creditors to slash your debt down to a more manageable amount of say $25,000. Debt settlement can also drastically reduce your monthly payments. The debt settlement company can gauge how much you can settle your accounts for and negotiate a monthly payment that’s significantly less than what you’re currently paying. This means that you can breathe a sigh of relief every month when you pay your bills, knowing that you have more financial freedom to live your life the way you want to.
2. Payment Flexibility
Unlike loans, credit cards, or Chapter 13 payment plans, debt settlement gives you the flexibility to set your monthly payment amount. If you’re not currently in a settlement, you can adjust your monthly draft to accommodate unexpected expenses or special occasions, like buying Christmas presents. This payment flexibility can provide much-needed relief and help you regain control of your finances.
3. Time
If you’re only making minimum payments on your credit cards, it could take years to pay off your balances. With debt settlement, once your accounts are settled, you’ll usually be on a fixed payment plan for 12-24 months to fully resolve your credit. This means you can save years of time and money that would otherwise be wasted on interest charges.
4. Avoid Bankruptcy
Bankruptcy can be a good option for some people, but debt settlement allows you to avoid it and still get debt relief. If you file for Chapter 7 bankruptcy, it will stay on your public record for ten years, and seven years for a Chapter 13 bankruptcy. However, with debt settlement, you can rebuild your credit score sooner and start enjoying financial stability faster.
5. Financial Flexibility
If you file for bankruptcy, it can take up to four years to get a conventional loan. However, with debt settlement, you don’t have those same restrictions. You’ll still need to rebuild your credit score after settling your debts, but the process can be much faster than bankruptcy. This means you’ll have more financial flexibility to pursue your goals and achieve your dreams.
6. Accountability
When you enter a debt relief program like debt settlement, most individuals cancel their credit card accounts. This provides a level of accountability and helps you avoid incurring new debt. Additionally, the program encourages you to create and stick to a monthly budget, which can help you develop good financial habits for life.
Cons
1. Potential for Debt Collection Lawsuit
Some creditors may attempt to sue you for unpaid debt in a debt collection lawsuit. However, the likelihood of being sued varies depending on the creditor. It’s important to research and understand which creditors are more likely to sue before entering a debt settlement program. Our debt settlement program analyzed this risk and created a free lawsuit likelihood calculator to help you estimate your risk.
2. Credit Score and Credit Report Impact
Debt settlement can negatively impact your credit score. The extent of the impact varies depending on your specific financial situation. For instance, if you’re already behind on your debts, you may see a lesser drop in your credit score. If you’re current on all your accounts, you may want to compare debt management to debt settlement. Check out our analysis to learn more about how debt settlement can impact your credit score.
3. Potential Taxes on Forgiven Debt
If you are tax solvent, you may owe taxes on the forgiven debt. However, if you’re tax insolvent, you may not owe taxes on forgiven debt. It’s important to speak with a tax advisor to determine your tax status and potential liabilities. Our taxes and debt settlement article provides a helpful overview of how tax solvency works.
4. Late Fees and Interest
Debt settlement companies often settle accounts when they have funds in the escrow bank account. This means that the actual debt at the time of negotiation may be higher than the negotiated amount. While the increase may be insignificant, it’s important to be aware of this potential impact.
5. Potentially More Expensive than Chapter 7 Bankruptcy
Depending on your specific financial situation, Chapter 7 bankruptcy may be a faster and cheaper debt relief option than debt settlement. While this may not be the case with Chapter 13 bankruptcy, it’s important to research and compare your options to make the best decision for your needs.
6. Creditor May Not Settle Account
While most creditors are willing to settle debt for less than what is owed, some may refuse to settle. It’s essential to work with a debt settlement company that understands which creditors are willing to settle and which ones are not. If you have a creditor who won’t settle, you may want to keep that account out of the debt settlement program.
What is ClearOne Advantage?
ClearOne Advantage pitches a product known as debt settlement. The company was founded in 2008 with a network of over 800 employees. The company is accredited by the International Association of Professional Debt Arbitrators(IAPDA) and the American Fair Credit Council (AFCC). Some people consider debt settlement as a debt consolidation program, but that’s not to be mistaken as a debt consolidation loan. With debt settlement, a company’s goal is to negotiate your total balance due down once the accounts are past due. For example, a debt settlement firm may try to negotiate a $10,000 balance down to $5,000, which is why the monthly payment quoted is often lower than what you may currently be paying. I was the previous CEO of a debt settlement company, and I believe debt settlement can be a good option for some, but not for others.So, debt settlement may be a great option for you, but it’s helpful to understand each of your options.
How Does ClearOne Advantage Work?
ClearOne Advantage works by helping debtors negotiate for a smaller lump sum payment on unsecured debts. Its process can be broken down into four steps which include:
- Clients meets with a company representative
- The client is enrolled in the company’s debt settlement scheme
- The client begins to make payments into a designated account
- ClearOne Advantage starts to negotiate with creditors
Let’s explain those steps in detail:
Step 1: ClearOne Consults with Certified Representative
You’ll be assigned to a representative, likely a debt specialist, on approaching the company. The individual will carry out a detailed analysis of your debt to ascertain the possibility of getting a favorable agreement with debtors. The debt specialist then assigns you a stipulated amount as monthly payments.
In analyzing your debt, the specialists consider your total debt sum, defaults, type of debt, creditors, initial debt repayment plan, and earnings.
Step 2: Get Enrolled in the Debt Settlement Plan
Once the company’s representative has certified you for the program, you’ll be required to sign some pieces of documents. This document provides the legal framework, enabling ClearOne to carry out negotiation processes. The company’s representative assigned to you will send you a copy of your personalized payment plan. Attached will also be a copy of a designated account number.
Step 3: Make Monthly Payments
You can start paying now that you’ve been given a designated account and monthly payments plan. The account is an FDIC-insured escrow account that ensures that your money is safe. Beyond this, some rules and regulations ensure that your money is used for the right purpose.
Step 4: The Negotiation Commences
Once you have up to 40% of your total enrolled debt sum in a designated account, ClearOne will start meeting all your creditors.
The goal at the negotiation table will be to get your debtor to accept less than what you owe. So let’s say you owe a total debt of $10,000. The company’s goal will make your debtor collect about $5,000 or less. Once they accept and the payment is made, you no longer owe any amount.
Should you Work with ClearOne?
So, you may be wondering if you should work with ClearOne Advantage.
It is completely your choice, but it is important to weigh all the pros and cons of working with them or any debt settlement company.
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