Question:
Dear Steve,
Due to poor judgment, I went into business with the wrong people. As a result, my credit cards were maxed out, and all inventory was stolen. I struggled to make payments on everything before this proved too much. Finally, I could no longer pay my bills.
Again I was a victim of my poor judgment. I hired a debt settlement company (2019). I was so ashamed of myself. I wanted to pay my bills. But this meant I was going to have to talk to someone. I have extreme anxiety (and other general head fuckery), making it impossible to speak to anyone. My anxiety compounds the ultra shame I feel. So I bit the bullet and hired Clear One Advantage.
About six months into this, I was having doubts, but I have stuck with it. I make my monthly payments. But some bills were late coming in, and they have been added to the original agreement. I will spare you all the details and get to my latest experience, and I am at a loss.
One of these late bills was turned over to a recovery company, and when I failed to make a settlement with them, they turned it over to a law office. This got us served with a summons to appear in court in Oct. 2021. I tried desperately to get something worked out to avoid court. After many unreturned phone calls and being told this was my fault because I refused to make any extra payments when they asked (which is total BS), we found ourselves in court four times (I think).
In January, I was told they made a deal with the law office. I would pay $500 down and $125/month from Feb to December. This amount was on top of what I was already paying. We assumed all was taken care of. Imagine our surprise when we had to show up in court in April. While we are here, we find out that Clear One has NOT made any deal with the law office. We are being lied to.
We are at a loss on what to do. Any advice would be greatly appreciated.
Thank you for your time and attention.
Vickie
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Answer:
Dear Vickie,
I completely understand how anxiety and fear can hold someone back from making great choices. The desire to avoid confrontation or dealing with someone one-on-one can be powerful. Unfortunately, that is human nature and a daily reality for many. I’ve watched many people make decisions to diminish the stress quickly rather than do what might be best for them.
From my point of view, the issues you feel you are having with ClearOne Advantage are more of a customer service problem and potentially a lack of communication on their part.
The most significant issue here is if a debt settlement approach was best for you to begin with. I’m not convinced it was based on what you’ve shared.
I hope you’ve had a series of teachable moments throughout this experience. One of my mottos is there is no sense in wasting a perfectly good mistake. Let’s get that value out of the experience if there is something to learn.
I have no idea what advice ClearOne Advantage gave you when you first contacted them. You also mentioned because of your shame you wanted to pay all the bills. Many people feel that. I know I did when I went through my bankruptcy. Ironically, after my bankruptcy, I tried to repay my creditors to no avail. The creditors sent back my attempted payments and told me not to send more. As far as they were concerned, my accounts were closed.
An emotional response rarely leads to good choices. However, you emotionally felt obligated to repay your debt and hired ClearOne Advantage to assist you in accomplishing that. After hiring them, I’m confident you felt the entire situation was handled.
I’ve often heard people say that they feel an obligation to repay their creditors and elect to settle their debt after talking to a debt relief company. The irony is that settling your debt is not paying your debt. Instead, it is paying some of your debt. It is also an attempt to repair your financial past instead of your financial future, and I am not convinced that makes sense. The past is gone. It is only the future we can prepare for.
What do I mean by that?
Let’s say you are 30 years old and you spend the next five years settling your debts. Because you are directing money each month towards your old debts, you can’t use those funds to save today for retirement.
Thinking about the future in a time of financial crisis is essential. So is saving money each month into a savings account as you try to dig yourself out of debt. But unfortunately, that fact is counterintuitive for many. People believe they need to direct every dollar towards debt reduction, but that is the wrong approach.
Let’s look at an example of what digging yourself out of debt would cost you if you were spending $500 a month on debt settlement fees and payments. Using that monthly payment for retirement savings, you would have saved almost 1.3 Million dollars towards your retirement at age 70 if you stopped saving after five years and never made another deposit.
You can use my online calculator to find out how much retirement you might lose by repaying old debt.
The most critical question you need to ask yourself is how much potential retirement savings are you willing to throw away to repay your past financial mistakes?
Ask yourself, does it make sense to throw away your financial future to try and repair the past?
Based on the cost of dealing with your old problem debt, a Chapter 7 bankruptcy is significantly less expensive. For about $2,000 you could have legally eliminated the debts in about 90 days or so.
Logically a Chapter 7 bankruptcy makes much more sense than an emotional choice of feeling obligated to repay past bad debt with future money when you have even more critical obligations ahead, such as retirement.
We have a looming retirement crisis ahead. Social Security alone will not be able to pay for safe housing and proper care.
A critical multiplier of the amount you will have at retirement is time. The longer your investment is earning a return and growing, you will have. Conversely, the longer you wait, the less you will have. For example, if you waited to start saving at age 35 instead of 30, you’d lose about half a million dollars in retirement.
At this time, you need to evaluate how much debt you have left to settle and if you don’t have much longer, then it might make sense to finish what you started.
However, I would decide what to do using math and logic and not emotion, fear, or shame. The only person that can create negative feelings about your debt is you. Your creditors certainly don’t care and nobody there is spending time thinking about you. Typically debt collectors will use the moral obligation to repay argument as a way to manipulate people.
When this relationship with ClearOne Advantage started, I feel confident they gave you the necessary information to hire them, and they were interested in selling you their product. They did what was best for them and had no duty to push you to do what might be best for you.
If you want to try and correct the perceived poor customer service you feel you have received, then read my post How to Get Your Money Back From a Debt Relief Company if You Feel Like You’ve Been Scammed.
The process I layout is a reasonable step-by-step approach to allowing the company to correct any errors and meet you in the middle to resolve your unhappiness.
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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Have you guys seen the BBB complaints (and reviews) about this company?! I wouldn’t be surprised if they went out of business soon. Very unethical and verging on immoral company.
I can write eight paragraphs explaining my personal experience as well as other people but I hope you will take my word for it.
Left question about ClearOne Advantage and worried I made a mistake.
Thank you so much for your question. I answered it and made it into my podcast today. Come back and post any updates here in the comments with what you decide to do.