When you’re buried in debt, it can be difficult knowing the right way to handle it. You have numerous options for handling your debt, from debt consolidation to bankruptcy.
One option you may be exploring is debt settlement. Although you can settle your debt on your own, companies such as ClearOne Advantage may help make the process easier.
Learn more in this comprehensive review of ClearOne Advantage.
What is ClearOne Advantage?
ClearOne Advantage is a debt settlement company based in Baltimore. The company employs over 200 team members and has settled over $450 million in debt.
ClearOne Advantage helps customers create a personalized debt repayment plan that includes depositing savings monthly into a “dedicated account.” Funds saved in this account are used to pay off debt settlements negotiated on your behalf. There are no fees charged for the service unless your debt is resolved.
ClearOne Advantage is BBB accredited. The company is not in the business of credit counseling or credit repair. As a debt settlement company, the mission is to negotiate settlements to reduce your debt balances.
Breakdown of ClearOne Advantage
Here’s an overview of the ClearOne Advantage basics:
ClearOne Advantage offers debt relief through debt settlement. A debt settlement is when a creditor agrees to settle your debt for less than what you owe. At ClearOne Advantage, a debt specialist reviews your debt and comes up with an amount that you should deposit into an account that’s set up for you as part of the ClearOne Advantage program. The amount you save up in the account is used to repay your settlements and fees once an agreement is reached.
Minimum debt required
Soft or hard credit pull required
Soft Pull required
The first settlement can happen within 3 to 4 months of signing up for the program, although, the timeline can vary. On average, it can take 24 to 48 months to complete the plan but it depends on your debt balances.
The fee may be 25% of the debt you enroll in the program on average but varies depending on your credit and balances.
Types of debt accepted
Credit cards, payday loans, medical bills and other unsecured debt is accepted. Private student loans may qualify. Federal student loans do not qualify.
ClearOne Advantages gets an A+ rating from the BBB; ClearOne Advantage gets 3+ stars from customer reviews on the BBB website.
Free resources and tools
ClearOne Advantage offers a few articles and other resources to help customers determine the best ways to resolve debt.
ClearOne Advantage customer service is available for enrollment questions 7 days a week. Existing clients can get help Monday through Friday during business hours.
- You need to have at least $10,000 in unsecured debt to qualify. Your credit report and debt balances will be reviewed to determine if you’re eligible. If you’re not sure whether a debt settlement is for you, learn more about how it compares with debt consolidation.
What are the benefits and risks of ClearOne Advantage?
Settle your debt for less money. Undoubtedly the top benefit of working with a debt settlement company is the possibility that you’ll settle debt for less than what you owe. A settlement may save you money and having experts doing the work can save you time and stress.
Fees. This type of service can cost you quite a bit of money. You may pay around 25% of the original debt amount. This gives you another bill to keep up with on top of the debt that you’re paying off.
ClearOne Advantage offers guarantees. ClearOne Advantage has protections for customers. You can get back fees paid on a settlement within 30 days if you’re not happy with the agreement. You can also request to get a refund of fees within 7 days of your first settlement if the settlement amount plus fees are not less than your original debt balance.
Your credit can be destroyed and you could get sued. Debt settlement companies don’t make payments toward your debt. You may be encouraged to stop making payments as well until a settlement agreement is reached. This can do major damage to your credit report and score. Fees and interest will likely be added to your unpaid balances. You could also get sued for the unpaid debt. Working with a settlement company doesn’t put a stop to creditors doing what they are legally allowed to do to get money from you, and there’s no guarantee that you’ll get a settlement.
Settlements could speed up debt repayment. Lowering your debt balance with a debt settlement can help you repay debt faster. The timeline for debt repayment will vary depending on the debt you enroll in the program and how much you deposit into the account for repayment. The first settlement can take 3 to 4 months to come through. But you can speed this process up by adding additional money into the account if you get your hands on a bonus, tax refund or extra cash.
High balances are generally required. You need to have a relatively high amount of debt to be a good candidate for a settlement company. Creditors may be less willing to settle with consumers who have a debt balance that can be paid off in a relatively short time.
No fee charged unless a settlement is reached.You approve every settlement. No fees are charged until a settlement is reached and you agree to it.
Forgiven amount may be taxable. The money you save from a debt settlement can be taxed. Speak with a tax professional to understand what your responsibilities will be if you settle a debt for less than what you owe.
How much does ClearOne Advantage cost?
The cost of the program will vary depending on the debt balances you enroll in the program. According to ClearOne Advantage, a fee estimate is 25% of the original debt you enroll. Here’s how that may play out, assuming you’re looking to settle $30,000 in credit card debt:
|Credit card debt||Settled debt amount||Fee estimate||Total amount due|
You may be able to pay the fee in monthly installments. However, customers reviewing the company on the BBB website note that their fee came out in a lump sum from the dedicated account. The remaining cash got distributed to the creditors. They had to continue depositing cash into the account to pay off the settlement.
How long does the program take?
It can take three to four months for you to get notification of your first settlement. According to ClearOne Advantage, on average customers complete the program in 24 to 48 months.
Is ClearOne Advantage safe to use?
ClearOne Advantage is accredited by the BBB and has an A+ rating. Customers report that employees are respectful and nonjudgmental. But there are some complaints about the service that you should consider carefully before signing up.
One big complaint is that the fee may be taken in one lump sum after you approve an agreement. As a result, a good portion of the saved money in customers’ dedicated accounts went to the fee, with minimal cash going to the actual creditor. If you decide to go with ClearOne Advantage, make sure you understand how cash will be allocated. Get conversations you have with the company in writing. There are a few complaints that representatives give conflicting information.
Other complaints filed with the CFPB state that customers may be pushed to accept settlements that they’re hesitant to sign, and that the ClearOne Advantage fees on top of the settlement payment can make monthly payments to resolve the debt unmanageable.
How do I sign up for ClearOne Advantage?
There are two ways to get started with ClearOne Advantage:
- You can get a free consultation with a specialist first. You tell them about your debts, and they’ll perform an analysis that can take up to 20 minutes. The specialist will tell you how the plan works and how much it costs.
- The other option for signing up is doing it online by giving basic information about yourself and the debt.
What to expect after signing up for ClearOne Advantage
- Step 1: Establish a debt settlement plan. After signing up with ClearOne Advantage, you’ll receive a customized debt settlement plan and begin making regular deposits into a dedicated account.
- Step 2: Negotiation. The company will negotiate a settlement for you.
- Step 3: Review the settlement. When a settlement is reached, ClearOne Advantage will approach you with the agreement to sign off on.
- Step 4: Approve the settlement. Read through all disclosures and agreements before authorizing. You need to know how much the settlement is going to cost you and how the payments are going to be made to creditors and ClearOne Advantage.
Alternative methods to pay down debt
Working with a debt settlement company for a fee isn’t the only way to resolve your debt. Here are a few other alternatives that can help you pay down debt:
DIY debt settlement
Instead of paying someone to settle your debt, you can do it on your own. Send settlement offers to each of your creditors in writing. All settlement deals you reach should be in writing as well. Once the debt is paid off, get confirmation that you’ve fulfilled the terms of the agreement and keep the record on hand should get asked about the debt in the future. Learn tips for managing and settling debt here.
- DIY settlements can save you cash. Debt settlements that lower your balance can help you pay off debt faster.
- It’s free. You don’t have to pay someone else a fee — in one lump sum or in monthly installments — for coming up with a settlement for you. You keep all the savings.
- The damage to your credit. Bills may go unpaid while you negotiate a settlement agreement. Letting bills and penalties pile up will impact your credit report and score.
- Settlements are not guaranteed. There’s no guarantee you or a settlement company will be able to come to an agreement with creditors.
Debt consolidation is when you take out a new form of debt to repay your other debts. A debt consolidation loan, also known as a personal loan or balance transfer credit card are examples of debt consolidation tools. Debt consolidation is a solution that’s best for consumers who are still pretty current on their debt. Lenders may be less willing to offer a debt consolidation product to someone who’s defaulting on debt left and right.
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- Savings. Using a low-interest personal loan or 0% intro APR balance transfer card can save you on interest.
- Simplified payments that stay current. Turning all of your payments into one payment can make it easier to manage your monthly bills. If you use a balance transfer card, be careful not to make just the minimum payment. Divide your balance on the card by the number of months you have 0% APR and pay that amount monthly. If you still have a balance at the end of the 0% APR term, you can transfer the remaining balance to another low-interest product until your debt is repaid.
- Credit inquiry. A debt consolidation product will likely require a hard credit inquiry. But many lenders let you do a soft pull at first to check personal loan rates before you complete a full application.
- You pay what you owe. Debt consolidation doesn’t work like a settlement where you settle for less than the original balance. A consolidation is restructuring your present debt balance and not lowering it.
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Debt management plan
A debt management plan or DMP is a program offered by credit counseling services. You and a counselor meet to discuss your finances. They come up with a repayment plan. Once a debt management plan is set up, you make one payment to the credit counselor who disperses your payments to creditors until your debt is paid off.
- Support from an expert. If you’re having trouble paying down debt on your own, a credit counselor can offer guidance. Working with a credit counselor also means you won’t have to communicate with your creditors. The debt counselor will take care of that for you. They can also negotiate lower interest rates and fees.
- Additional credit services. Credit counseling organizations that offer debt management plans may also offer other education services. You can use these services to learn money management skills to avoid debt in the future.
- The cost. Debt management plan services can have a one-time enrollment fee or a monthly fee that can be $25 to $35.
- Doesn’t decrease the amount you owe. A debt management plan isn’t intended to settle your debt. The debt management plan can lower your interest rate or fees, but it won’t lower your principal balance. You pay what you owe.
Bankruptcy can be a solution when the situation is dire. Chapter 7 and Chapter 13 bankruptcy are the types most commonly used by individuals. Chapter 7 is when your assets (excluding some exceptions) are liquidated to repay your debts. Chapter 13 is when a repayment plan of three to five years is established and you pay a portion of your debts. After the repayment period, unsecured debts may be discharged.
- Bankruptcy gives you a new start. Filing can give you a clean slate if your debt is insurmountable. Bankruptcy should put a stop to lawsuits and collections calls.
- Bankruptcy can save your home. Depending on your case, filing bankruptcy can stop a foreclosure. You may also be able to keep certain assets as part of the agreement.
- It’s not free and your credit will take a hit. There are filing and attorney fees to consider. Bankruptcy can do a number on your credit. It can stay on your report for seven to 10 years.
- Not all debts can be discharged. All isn’t forgiven. Student loans, for example, are a form of debt that may not be discharged. Speak with an attorney to learn which of your debts can be discharged if you decide to move forward with bankruptcy.
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