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We Signed Up With ClearOne Advantage And Now Getting Sued by Navy Federal Credit Union. – Fran

“Dear Steve,

We have signed up with a debt consolidation company Clear One Advantage a year ago we are in debt 100k.

What does it mean to be sued by a Navy Federal Credit Union. Can they take our house, cars assets? How should we handle this mess. Should the debt consolidation company step in?

Fran”

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The Answer

 

Dear Fran,

ClearOne Advantage is a debt settlement company. I suspect they enrolled you in a program where you pay them a certain amount each month and they take their fees from that money and “save” part of it for future settlements.

There is a huge difference between a debt consolidation company, like getting a debt consolidation loan from a company like LendingClub.com and a debt settlement company.

When you are working with a debt settlement company you are not making payments to your creditors. You are willingly in default of your contract with the creditor when you do that. The creditor may avail themselves of all remedies under the contract and through the courts. You can be sued, and you will probably lose. In that case your wages could be garnished and a lien placed against your house. This is serious stuff.

In fact Care One Advantage even says so if you hunt for it on their site. Did they explain these consequences to you?

BY SIGNING BELOW, YOU ARE STATING CLEARONE ADVANTAGE HAS EXPLAINED TO YOU, AND YOU UNDERSTAND ALL THE ISSUES BELOW:

1. You are enrolling into a debt settlement program after voluntarily seeking the assistance of ClearOne Advantage. The goal you have set is to negotiate mutually agreeable settlements between you and your creditor(s) for payment of certain unsecured debt(s) described as Enrolled Debts. No specific results can be predicted or guaranteed.

2. You will be responsible for saving sufficient funds that you control to fund debt settlements that ClearOne Advantage will endeavor to negotiate on your behalf. You and only you will be in control of all settlement funds and under no circumstances will ClearOne Advantage have custody or control of the funds you set aside to fund debt settlements.

3. The savings program you have made to reach your debt settlement goal is detailed in your Client Agreement. Summaries of the total settlement amount, monthly savings, and the period needed to reach your goal were prepared based on the goal you selected. Those summaries reflect the minimum amount that we have estimated you will need to save to put yourself in a position to reach your goals. Actual settlement amounts, necessary savings and the period required to reach your goal may vary based on creditors actions and other factors that may affect or prevent the realization of your goals.

4. Most creditors and collectors negotiate with Debt Settlement Service Providers, ClearOne Advantage cannot force the negotiations and cannot force creditors to accept a settlement. ClearOne Advantage does not make regular monthly payments to your creditors. Your creditors may continue collection efforts on delinquent accounts while you are enrolled in a Debt Settlement Program. Such collection efforts can include phone calls and letters to you, charging off the account, sending accounts to collection agencies or attorneys, lawsuits and even garnishments of your wages if a judgment has been obtained. ClearOne Advantage makes no claim that it will be able to stop these collection activities. These activities may continue while ClearOne Advantage is making its best efforts to negotiate your debt.

5. Your Debt Settlement Program assumes an effort that will continue for many months. The time needed to produce a settlement depends on a number of factors. These may include: (a) your financial hardship, (b) the age and balance of the accounts that you owe your creditors, and (c) the funds you have available to pay for a settlement; and (d) the willingness of individual creditors to enter into debt settlement negotiations. While no guarantees can be given, generally the quicker you save money the sooner you will be in a position to reach your goals. Increased savings will provide you with the option to accept lesser discounts and will also enable you to accumulate funds to reach your debt settlement goals more quickly. However, any settlement must be acceptable to both you and your settling creditor.

6. The fees paid to ClearOne Advantage are intended to compensate them for its efforts and will only be refundable to the extent they have not been deemed to have been earned in the manner described in the Client Agreement. Those fees are not being set aside or held in escrow to fund debt settlements. Fees paid to a Debt Settlement Services Provider such as The Company’s Name for its services will not be available to pay creditors.

7. Communications with creditors are handled on a case by case basis. In some instances creditors may not be contacted until several months after you enroll.

8. You have stated that, because of circumstances beyond your control (hardship), you are unable to meet the minimum payments required by your creditors. If you do not make required minimum payments to your creditors you may be breaking the terms of your agreements with them and your actions will probably be reported to consumer reporting agencies as late, delinquent, charged-off or past due balances. Your creditor may also raise the interest rate on your account and impose other penalties. Your account balance may continue to grow as your creditor adds accrued interest, late fees, over- limit fees and penalties. Your balance may continue to grow until a settlement is reached with your creditor; and, if negotiations are unsuccessful, you could be called upon to pay the entire balance. After settlement your creditor may comment that the account was “settled for less than the full amount” on your credit report. A Debt Settlement Program may have an adverse effect on your credit report and credit score.

9. When your creditor settles your debt, a savings of $600 or more off what you owed may be reported by your creditor to the IRS as Discharge of Indebtedness income. You may wish to consult your tax advisor to determine whether your individual circumstances may permit you to exclude any such Discharge of Indebtedness Income from your reportable income due to insolvency. For more information on tax ramifications to you personally you may also wish to consult a CPA or Tax Attorney and to refer to the IRS website www.irs.gov IRS Publication 908- “Bankruptcy Tax Guide” and IRS Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness available on the IRS website.

10. You acknowledge that the company is not a law firm and cannot provide legal advice.

11. You understand that you have the responsibility and the right to communicate my comments directly to the company’s management using the information provided below:

ClearOne Advantage
7125 Thomas Edison Drive, Suite 204
Columbia, MD

www.clearonedebt.com

Upon request, you will receive from the Company the refund procedure and grievance policy. Finally, you have a right to report directly any concerns to TASCTM via email: [email protected]

Source

So, what to do, it is probably going to require you to file bankruptcy to stop the lawsuits and eliminate your debt without further collections or suits. I urge you to click here to find a local bankruptcy attorney you like. Make an appointment and go talk to them.

The debt settlement company is not going to jump in and represent you here and they have said “ClearOne Advantage makes no claim that it will be able to stop these collection activities.” I would bet that was not made really clear when the program was sold to you. Was it?

Big Hug!

We Signed Up With ClearOne Advantage And Now Getting Sued by Navy Federal Credit Union.   Fran
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If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

We Signed Up With ClearOne Advantage And Now Getting Sued by Navy Federal Credit Union. - Fran by

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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Linda Gilbreth

    I am totally shocked because they sounded like they where representing me totally. And it would just take 3 months to do so.

    Now I think see how my check can be garnished maybe i just need to take the payments i have scheduled to sent them to just go get a lawyer. And File bankrutpcy that way no garish ments on my poor pay check. I wish i would of read this site before taking all the time to get enrolled what a bunch of bs.

    welcome to america where if it sounds to good to be true it is!!

    Just average folks trying to the best they can. And now your credit report makes ur insurance higher on house and car and you may not even be able to get a job in some states because they get to look at that too.

    the credit card companies are putting a choke hold on americans and thats where thay want us.

    Whats that old song”I Sold my soul to the company store”,”Another day older and deeper in debt”.

  • KarenJ

    I work for a debt settlement company and we don’t take any credit union debt into our program at all.  If they settle, it would be at 75-80% of the balance, and with the company fee, there would be no savings at all.  They should never have accepted it to begin with.

  • Offutt

    Clear One Advanage did’t do me any justice.  I could have done everything on my own really. stop paying on the loan bill, and saving money into Global a bank account.  I was pressed to save money into my saving; but money was hard to come by really.  They should have known that I didn’t have that money to start with  Or I would have not needed their help.  One Main financial a loan company didn’t give me much time before I got notices to appear in court.  Approximately 5 months, and I was back and forth constantly.  One Main lawyers wanted Clear One to contact them to work out something on my behalf.  When I notified Clear One that my money would be garnished from my job.  I barrowed money from another company to pay off the One Main or partially amount.  My account was frozen, and I have not been able to go into my bank account.  What is bad is that Clear One gave Global permission to put money that I was saving into my frozen bank account  without consulting with me.  Clear One said that they didn’t  give permission to Global.  But Global said that they did.  That money was for my other bills to keep me going until garnishment was lifted.  Clear One really put me in a big bind.  Checks are still bouncing back and forth everyday.  Did Clear One think that they were going to get some of my money, and not get the proper help from them.  I HOPE NOT so; because I did negotiation or handled everything by myself.  Never again will I seek help from anyone before I research matters further and companies.

    • absolute ripoff

      The objective of Clear One is to have you stop making payments on
      your unsecured debt (regardless of your current credit score) so they
      can “negotiate” a settlement amount once the account has gone into
      collections.  Literally, anyone can negotiate a settlement once it has
      gone to collections. They possess no special skill other than convincing
      people to stop making payments so the account can go to collections.

      The fact the CEO has been nominated for the Ernst & Young Entrepreneur of the Year is utterly laughable.

      Clear One is a disgusting, farce of a company and you are a fucking idiot if you use them.
       

  • Exal R.

    I’m about to become a Clear One Advantage ! My question is, is Clear One Advantage a scam?

    • http://GetOutOfDebt.org Steve Rhode
    • Anonymous

      Be sure to ONLY enroll with a company that receives their fee AFTER they settle your debts. It forces the company to earn their fees & you will not pay for a service you don’t receive in the event your financial situation changes over time!

    • Anonymous

      Be sure to ONLY enroll with a company that receives their fee AFTER they settle your debts. It forces the company to earn their fees & you will not pay for a service you don’t receive in the event your financial situation changes over time!

  • Samuel

    This couldn’t be worse advise. If you just avoid and pay nothing then you will get sued, get a judgment, and have your wages garnished. I enrolled 4 accounts and only have 1 left to settle. Patience was hard but was also key. I’m not saying it was easy but it saved me alot of money and am grateful to ALMOST be debt free.

  • Lucy Fussbudget

    Clear One Advantage has only one advantage, and that is to take your money and deposit it in their account. But, settle your debt? Get serious!

    Avoid it is the best thing you can do.

    What to do with debt? Most debt will go away in 4 years if you don’t pay it, except for taxes and student loans. So, your best approach is to just don’t pay it and watch the clock to start the count down.

  • http://twitter.com/LucyFussbudget Lucy Fussbudget

    Clear One Advantage has only one advantage, and that is to take your money and deposit it in their account. But, settle your debt? Get serious!

    Avoid it is the best thing you can do.

    What to do with debt? Most debt will go away in 4 years if you don’t pay it, except for taxes and student loans. So, your best approach is to just don’t pay it and watch the clock to start the count down.

    • Samuel

      This couldn’t be worse advise. If you just avoid and pay nothing then you will get sued, get a judgment, and have your wages garnished. I enrolled 4 accounts and only have 1 left to settle. Patience was hard but was also key. I’m not saying it was easy but it saved me alot of money and am grateful to ALMOST be debt free.

    • Cathywithers

      That’s bad advice. Most debt does not just go away. How can you say that? People could end up on the street if they just don’t pay..

  • Tt07305

    Clear One takes advantage of people already in a bad situation. I have been in the program for just over a year. I have had 2 accounts settled. One which I am still receiving bills and court orders on. Every time I ask for proof of settlement, I never receive anything. The fees are astronimical the first year.

  • Felicia

    I have been in a program with clearoneadvantage for about a year and 2 months and 2 of my 5 accounts have been settled. I was a bit confused and worried at first because I felt nothing was happening with my money, but then settlements came in about 7 months into the program. It really is worth doing. At no point do I think they may have mislead me. You can’t enroll without reading the contract first, by law. I have my sister and best friend both on clearoneadvantage settlement program.

    • Tt07305

      Clear One takes advantage of people already in a bad situation. I have been in the program for just over a year. I have had 2 accounts settled. One which I am still receiving bills and court orders on. Every time I ask for proof of settlement, I never receive anything. The fees are astronimical the first year.

  • Bruce Gionet

    I was told by a Clear One Advantage rep that my bank Chase) lied when they told me they would settle for at best 75% of the full amount. Is this accurate?

    • Miss Broke

      that is pretty accurate but it depends on the company. some will settle for less while others fight it out. Keep in mind it will get ugly before it is done. Change your phone number, do all that Clear One tells you to. I am just about done with everything but have one right now who is getting very ugly, they are trying to seize property (property is worth triple what I owe) so I am putting vehicles in hiding.
      Good Luck!!

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