§ 28-1-29-7.7 — Budget analysis and plan; written statement to debtor; creditor's reduction of amount owed; disclosure of tax implications

Indiana § 28-1-29-7.7

• Jurisdiction: Indiana
• Art. 1: DEPARTMENT OF FINANCIAL INSTITUTIONS
• Ch. 29: Debt Management Companies

Text

7. (a) A licensee may not furnish debt
management services to a debtor unless:
(1) the licensee has prepared a budget analysis; and
(2) if the debtor is to make regular, periodic payments, the
licensee:
(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.".

Legislative History

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.