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Whether you are out of work or working for less, it's a recipe that could lead to a debt disaster. Whatever your circumstances, there are things you need to know when you are struggling with debt. Overwhelming debt can have a paralyzing effect where you avoid talking to creditors. This is not a problem that will go away by itself. The longer you ignore it the worse it will get. You need to take action. Help is available.
What Do I Need To Know?
Indiana passed legislation in 2010 regarding debt settlement. The law specifies that before any debt settlement begins, and before any money is paid, the debt settlement provider must deliver written disclosures that specify both the nature and cost of services that will be provided as well as the rights of the consumer.
It is important to note that the Indiana law did not put any restrictions on what fees can be charged. This is important to know since there is no minimum or maximum. It would be a good idea to spend time researching (see if a lot of consumers have complained) and shopping around before committing to one company.
Your Finances, Decision and Responsibility
Once you have decided to take action don’t rush to the first potential solution. Decisions about your finances can have long-lasting consequences, so rushing into something may leave you worse off than when you started. Know your rights and options. When searching for a debt settlement company, sit down with more than one and get as much information as you can.
The State enforces the Fair Debit Collection Practices Act of 1996. The Indiana state government keeps residents informed on credit counseling information, regulations and resources. Indiana provides information on federal credit law, consumer protection and counseling services.
For consumers looking for a credit counseling service, the state recommends if the initial setup fee is more than $50 and the monthly maintenance fee more than $25, this organization should be passed over when making a decision.
State legislation defines what credit and debt service organizations are, what services they may provide, and establishes guidelines on what these groups are not allowed to do. Indiana State Code 25-5-15 defines a credit services organization as providing debt settlement, credit improvement or credit acquisition services. The letter of the law is much more inclusive, but the State clearly defines what these organizations can and cannot do.
Credit counselors are permitted to assist with debt renegotiation, debt settlement or alteration of terms. Credit counseling organizations are required to obtain a surety bond or irrevocable letter of credit filed with the Attorney General. This ensures the protection of the consumer for up to $25,000 for any damages caused by the organization. Credit counseling service providers are required to provide a written statement to the buyer describing the services they offer and the total costs involved. The consumer is allowed three business days to cancel services after the date the contract is signed without any penalties or obligation.
Making false or misleading statements regarding the consumer’s credit worthiness, standing or capacity is prohibited. These organizations are also not allowed to guarantee the erasure of bad credit unless the consumer’s credit history is inaccurate or obsolete. If any agency makes promises that sound too good to be true, avoid them.
Additional Assistance For Indiana Residents
Before choosing to use a credit counseling service, the State recommends that consumers explore all their options, such as looking at adjustments they can make to their household budget and savings plan or possibly negotiating with their creditors directly. But if the situation dictates, look at several different counseling organizations, ask about their services, what printed information they can supply, and, of course, what their fees are.
Consumers are also encouraged to check with the Attorney General, local consumer protection agency or the Better Business Bureau and ask if any complaints have been filed against the organization. If a consumer feels they have been taken advantage of, they are urged to call The Indiana Attorney General's toll-free number at 1-800-382-5516.