As part of my junk mail program a reader sent in a recent copy of a letter they say they received from CareOne that has a very fit picture of founder Bernie Dancel on it.
There is only one big problem, the domain name listed on the bottom of the letter, CareOneInfo.com, isn’t actually owned by CareOne anymore and it goes to a site for sale page.
According to public domain records the domain name expired back in 2013.
Domain Name: CAREONEINFO.COM
8930 Stanford Blvd
Columbia, MD 21046
Record expires on 03-Jun-2013.
Okay, so that’s just a bonehead move if this letter did go out after June, 2013. Oops.
The cover of the letter caught my attention as well. Bernie talks about his bankruptcy he filed and how it helped him eliminate his debts. His story is a bit like mine, I filed bankruptcy as well. And after a period of despair and starting a credit counseling agency, like Bernie did, I eventually came to the conclusion that bankruptcy isn’t that bad. It is the sole legal way for a consumer to get power over their creditors and get a fresh start to start saving and doing better.
So I’m curious how the CareOne Brand, whatever the hell that is, can find an equilibrium between “So I filed bankruptcy without knowing that there may have been other options available to me — a difficult process that took a toll on my self-worth” and “provide each customer with a personalized debt relief option that was right for them.”
So what happens if bankruptcy is the right option for a “customer?” If the goal is, as the letter states, to “select a plan that works for your budget. And can help you get out of debt much faster than if you were to continue to make minimum monthly payments.”
A Chapter 7 bankruptcy discharge takes about 90 days and frees up all the payments that would have gone to much of the debt. So if the goal is “much faster” then wouldn’t bankruptcy be the best option if it improved your net-worth faster?
So I wandered over to CareOneCredit.com to see what they said since the website in the letter was busted.
As of the time of this article CareOne says:
“Debt Consolidation is a widely-used term to describe debt repayment plans* that allow you to get you out of debt as quickly as possible.
There are really two types of debt consolidation plans available in order to provide these benefits – a Debt Management Plan or a Settlement Plan. There are important differences between these plans that you should understand.” – Source
But isn’t a Chapter 13 bankruptcy a debt consolidation plan as well?
Trust me, I get it. I completely understand everyone wants to sell their widgets and is naturally probably a bit more bias towards what they have to offer, but what about some balance here?
So off I went to hunt for what the CareOne Brand has to say about bankruptcy. According to their site, when it comes to bankruptcy, “Bankruptcy is usually a last resort that involves a complex legal process created by Congress to provide relief from financial distress when you can no longer pay even a portion of your debts. Our hope is that after we review your situation, we can find an alternative to bankruptcy. If bankruptcy appears to be an option that you may want to consider, you will want to talk through that process with an attorney.”
Then they say, “There are two types of bankruptcy cases designed for consumers: Chapter 7, which erases most of your debts and is filed if you have insufficient income or property to pay your debts, with no prospect of creating additional income. The US Bankruptcy Code was revamped in 2005 to make it more difficult to qualify for Chapter 7 relief. Chapter 13 involves the creation of a debt repayment plan for approval by the bankruptcy court. A trustee is appointed to collect your plan payments and distribute them to creditors.
Bankruptcy may show on your credit report for up to 10 years. This may affect your job and loan applications, because job and credit applications sometimes require you to declare if you have filed for bankruptcy in the past. There is also a limit as to how often you can file for bankruptcy. You will need to consult with an attorney to determine if you qualify.” – Source
I’m sure they believe all of that but the facts don’t seem to support those statements. About 75 percent of people who file for legal bankruptcy protection file a Chapter 7 bankruptcy that eliminates their debt completely in about 90 days. And while a Chapter 7 bankruptcy can be reported up to ten years, a Chapter 13 is only reported for seven years.
It seems like a lot of scare talk to me. Especially with the statement about jobs and credit. So what if they require you to disclose a past bankruptcy? Granted it will be on your credit report but so will a debt settlement plan and those defaulted debts.
I think the good people at Care One want to provide good advice and from the looks of things they could do a much better job about putting bankruptcy fairly in the mix, especially when you consider the long term impact to retirement savings from a monthly repayment plan like a DMP or debt settlement.
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