Debt Settlement Pros & Cons

If you are struggling with a heavy load of debt and are feeling overwhelmed, debt settlement might be the right solution for you. Debt settlement with ClearOne Advantage not only can save you a considerable amount of money, but it is the only debt relief option besides bankruptcy that can actually reduce the amount of your principal debt.

According to the American Fair Credit Council's 2019 National Economic Impact Study of the Debt Settlement Industry, in 2018, the average settlement amount was approximately 55 percent of the debt held by the debtor at enrollment. Even after deducting fees paid to debt settlement companies, the average client saved approximately 37 percent.

At ClearOne Advantage our goal is to negotiate the best deal possible for you with each of your creditors. To get a better understanding of how much you could possibly save you should get a free debt analysis and savings estimate specific to your situation from one of our Certified Debt Specialists.

 

How Does Debt Settlement Work?

It all starts with a simple phone call that only takes about 20 minutes. A ClearOne Advantage Certified Debt Specialist will ask a few simple questions to review your financial situation and find creditors who may be willing to agree to settle your debt for less than you currently owe.

When you have agreed to the plan your Certified Debt Specialist presents to you, you stop making payments to the creditors identified in the plan and start making deposits to an escrow account ClearOne sets up for you instead. ClearOne does the rest of the heavy lifting, negotiating with your creditors on your behalf. You owe no upfront fees. ClearOne will collect fees when your debts are actually settled.

 

ClearOne Debt Settlement Pros and Cons Couple

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The most important advantage of debt settlement is that it can save you money and get you out of debt in a reasonable timeframe.

Debt Settlement

Advantages

  • In addition to the debt ClearOne Advantage can eliminate through negotiation, you also save the interest that you would have otherwise had to pay on the full amount owed.
  • With a Debt Settlement Plan (DSP), you get to discharge your debts one at a time. This way, if you terminate your program before full completion, you will have still effectively dealt with some of your debt.
  • You retain full veto rights over your DSP. You only pay fees on settlements you approve, after ClearOne concludes the renegotiation.
  • Debt settlement is the only debt resolution method that does not entail upfront costs.
  • Through debt settlement, you can address all types of unsecured debt, not just credit card debt.
  • The success rate of the method is superior to other debt resolution options. Some 61 percent of those who participated in a DSP settled at least one account.
  • The FDIC-insured dedicated savings account that you use for your DSP payments remains under your full control.

Possible Disadvantages

  • Debt settlement is an aggressive approach to eliminating debt and not all creditors may agree to negotiate. Your debt settlement firm knows, however, which of your creditors are most likely to settle and is therefore in the best position to reach an agreement that favors you.
  • Your credit score will suffer as a result of debt settlement, but not as much as it would if you choose bankruptcy instead. Realistically, however, if you are struggling to make payments now, it is quite possible that your credit score has already taken a hit.
  • The money you save through debt settlement may carry tax obligations1. With some exemptions, such savings are considered income. Your tax attorney can tell you more about how debt settlement will impact your tax situation.

1IRS Topic No. 431 Canceled Debt – Is It Taxable or Not?

 

Is Debt Settlement Right for You?

A ClearOne Advantage Certified Debt Specialist can help you to determine if debt settlement is the right option for you, as well as help you put together a customized solution to fit your financial situation. Defeat your debt the smart way. Find out how today.

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Thank you so much for all your help and making me feel comfortable...I think you know how hesitant I was about all this, but you helped me through it and realize that this is something that we really need to do.

- Becky, San Diego, CA