What are my Options to get out of Debt?

There are many options to choose between to manage your credit card debt.  Below is a chart that compares your choices for you to decide which route is the best for you to take.  In this chart we have 6 common options to choose from (there may be others not listed).

View Actual Settlement Letters.

ClearOne Advantage Decision Model

* Assuming a 10% interest rate.
** All figures include ClearOne Advantage fees.
*** Disclaimer - For illustration purpose only. Not available in all states, individual results may vary and are dependent on successful completion of program and ability to save funds. ClearOne Advantage does not assume or pay any debt, nor does it provide legal advice or offer credit repair. Read and understand the contract terms before enrolling.

Continue to Pay Minimum

Paying the minimum payment on revolving interest rate credit cards is a tough battle. To just maintain the balance without going deeper into debt, one must pay 4% of the total balance. Even at this rate it will take upwards of 35 years to pay off the balance. As you see above this is the most expensive and timely option.

Home Refinance

With the downfall and uncertainty of today's housing market and depreciation in home values, consolidating unsecured debt into a secured mortgage debt can be an uncertain option. Also remember that you will be paying on this interest and debt for 15 to 30 years. The goal of our program is to settle your debts.

Refinancing is a less desirable option, because people may get turned down or not qualify based on income, time on job, and equity in their home. Between the up front appraisal fee, title fees, escrows fees (taxes and insurance) and origination fee-which could end up costing you a total of up to $15,000-you are not getting rid of your debt but only transferring it from your credit cards to your home, while losing equity. If you hit a hardship and can't afford the new higher monthly mortgage payment you are now in risk of losing your home to foreclosure.

Consumer Credit Counseling

CCCS programs generally handle lower amounts of debt that debt settlement programs may not accept.  Clients do not receive creditor calls; however this debt option can be for up to 5 years or more, while the ClearOne Advantage program is between 2-4 years. The CCCS program may show up on your credit as the borrower in a "consumer serving program".  In contrast, during and after completion of the ClearOne Advantage program, the account will appear on your credit as "settled for less than full value."  Consumer’s that choose CCCS programs generally do not have problems making continued payments on their credit cards, and simply need structure and a modest interest rate reduction.  In comparison, debt settlement programs negotiate and settle on the principal, interest and penalties that are on the account all together. 

Bankruptcy

Chapter 7
While this option might meet some individual needs, the credit repercussions are great. A bankruptcy may stay on your credit for up to 7-10 years and should only be looked at as a last option. Clients should consider such an option only by consulting with licensed bankruptcy counsel.  

Bankruptcy allows for clients to enroll both their secured and unsecured accounts while debt settlement only handles unsecured debts.  However, bankruptcy may affect your ability to secure certain job promotions or positions as many inquire on the applications as to whether you have ever “entered bankruptcy.”  Chapter 7 requires up front costs for a lawyer to represent you in court and not all consumers are allowed to use it.  (There are some community legal services that may assist on a discounted basis.)

Chapter 13
This debt option is for 5 or more years, while our program is between 2-4 years. The positives of a chapter 13 bankruptcy include attorney representation and court protection from creditors.  On the contrary, like a chapter 7 your credit repercussions may be significant. A chapter 13 bankruptcy will stay on your credit for up to 7-10 years and should only be looked at as a last option. This option may also require significant up front costs, while our upfront costs are zero.  As always, consult with licensed bankruptcy counsel.