Question:
Dear Steve,
I, unfortunately, enrolled in Clearone Advantage to help get my debt down after a divorce, moving, and changing jobs.
I had 3 debts. One has been settled, one is almost settled, I think, but I just received a court notice for the 3rd. I am so scared. My credit score was through the roof before this and now I have the lowest of the low.
Do you have any suggestions as to what I can do to get out of this mess I’ve made? I’m a teacher and was just trying to settle after a life change and now I’ve just made it worse.
Tifini
Answer:
Dear Tifini,
I can certainly understand why you sought some assistance after your traumatic life changes. Changes like that are very disturbing and frightening on so many levels.
While you may be in a panic after being sued for the third debt, it is still possible for it to be settled. It really depends on how ClearOne deals with the lawsuit notice. I would encourage you to attempt to communicate with them about this without casting blame.
And while I can’t remember seeing a ClearOne client agreement lately, nearly every single debt settlement agreement I’ve seen consumers sign contains language buried in it about the possibility of being sued and changes to a credit score. I’d suggest pulling out your client agreement and reading through it again to make sure.
What salespeople sell on the phone and what people agree to when they sign a client agreement are frequently different from debt relief companies. Actually that is true of just about every company where the salesperson is the primary source of product information.
It can’t be any surprise that your credit score has tanked. For ClearOne to do what you hired them to do I best you stopped making payments to your creditors. That hurt your score. Then getting sued doesn’t help either but that’s the possible consequence of defaulting on your debt.
Frankly, bankruptcy is often the least expensive way out of debt in about 90 days for less than $2,000. But people are typically so afraid of bankruptcy that they demand other solutions that can have more traumatic consequences.
I am absolutely not blaming you for the decisions you made, just trying to explain it for others so people don’t have to have the same experience you did while trying to deal with a number of life changes.
At this point, I’d suggest the following course of action:
- Talk to ClearOne about the possibility of settling the lawsuit debt and if you have saved enough money to enter into a payment plan for the settlement.
- If ClearOne can settle the debt then it is time to start rapidly rebuilding your credit score. The same techniques after bankruptcy apply to rebuild your credit score after settlement.
- There is no sense wasting a perfectly terrible situation. Consider what lessons you’ve learned from this situation and do it differently next time.
It is absolutely natural to be panicked after being sued. It is traumatic. But at this point, I think you are most of the way down the path you selected and just jumping ship simply because you feel afraid would not be recommended.
You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
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