Indiana Code 28-1-29-7.7. Budget analysis and plan; written statement to debtor; creditor’s reduction of amount owed; disclosure of tax implications
(1) the licensee has prepared a budget analysis; and
Terms Used In Indiana Code 28-1-29-7.7
- Agreement: means an agreement between a debt management company and a debtor for the performance of debt management services. See Indiana Code 28-1-29-1
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Concessions: means assent to repayment of a debt on terms more favorable to a contract debtor than the terms of the contract between that debtor and a creditor. See Indiana Code 28-1-29-1
- Debt: means an obligation arising out of personal, family, or household use. See Indiana Code 28-1-29-1
- Debtor: means an individual whose principal debts and obligations arise out of personal, family, or household use and not out of business purpose transactions. See Indiana Code 28-1-29-1
- Licensee: means any person to whom a license has been issued pursuant to the provisions of this chapter. See Indiana Code 28-1-29-1
- Person: includes individuals, sole proprietorships, partnerships, limited liability companies, trusts, joint ventures, corporations, unincorporated organizations, other entities, and their affiliates, however organized. See Indiana Code 28-1-29-1
- Plan: means a written debt repayment program in which a debt management company furnishes debt management services to a contract debtor and that includes a schedule of payments to be made by or on behalf of the contract debtor and used to pay debts owed by the contract debtor. See Indiana Code 28-1-29-1
(A) has prepared a plan for the debtor;
(B) has made a determination, based on the licensee’s analysis of the information provided by the debtor and otherwise available to the licensee, that the plan is suitable for the debtor and the debtor will be able to meet the payment obligations under the plan; and
(C) believes that each creditor of the debtor listed as a participating creditor in the plan will accept payment of the debtor’s debts as provided in the plan.
(b) Before a debtor enters into an agreement with a licensee to engage in a plan, the licensee shall:
(1) provide the debtor with a copy of the budget analysis and plan required by subsection (a) in a form that identifies the licensee and that the debtor may keep whether or not the debtor enters into the agreement;
(2) inform the debtor of the availability, at the debtor’s option, of assistance provided through a toll free communication system or in person, where reasonably available to residents in Indiana, regarding the budget analysis and plan required by subsection (a); and
(3) with respect to all creditors identified by the debtor or otherwise known by the licensee to be creditors of the debtor, provide the debtor with a list of:
(A) creditors that the licensee expects to participate in the plan and grant concessions;
(B) creditors that the licensee expects to participate in the plan but not grant concessions; and
(C) creditors that the licensee expects not to participate in the plan.
(c) Before a debtor enters into an agreement with a licensee, the licensee shall, in a written form that is provided to the debtor separately, that contains no other information, and that the debtor may keep whether or not the debtor enters into the agreement, provide the following information to the debtor in clear and conspicuous type, surrounded by black lines:
“IMPORTANT INFORMATION FOR YOU TO CONSIDER
(1) Debt management plans are not right for all individuals, and you may ask us to provide information about other ways, including bankruptcy, to deal with your debts.
(2) We may receive compensation for our services from your creditors.
_________________________________________
(Name and business address of licensee)”.
(d) If during the term of a debt management agreement a creditor that is a participating creditor in the plan agrees to reduce the amount owed by the debtor, the licensee must, not later than fourteen (14) days after the date the creditor agrees to the reduction, provide the following disclosure in clear and conspicuous type, surrounded by black lines:
“IMPORTANT INFORMATION FOR YOU TO CONSIDER
(1) (Description of the terms of the reduction).
(2) Reduction of debt as described in item (1) above may result in taxable income to you, even though you will not actually receive any money.”.
As added by P.L.35-2010, SEC.126. Amended by P.L.89-2011, SEC.40; P.L.27-2012, SEC.72; P.L.216-2013, SEC.25.