Debt Resolution Disclosures
Last Updated: July 2023
AFCC Uniform Program Disclosure Statement
Council Law Group is a member of the American Fair Credit Council and has agreed to follow industry “best practices,” as endorsed by the AFCC, including disclosure of the following matters as an integral part of its contract with consumers.
Council Law Group provides consumers with a debt resolution service more popularly known as debt settlement. Debt settlement/resolution is the negotiation of less than full balance resolutions of unsecured debt on behalf of consumers who are experiencing financial hardship Council Law Group wants you to understand both the potential benefits and risks that may arise out of your debt resolution program and to be sure you have reasonable expectations regarding all potential outcomes.
AFCC Disclosures
BY SIGNING BELOW, YOU ARE CONFIRMING THAT Council Law Group HAS EXPLAINED TO YOU, AND YOU UNDERSTAND, ALL THE ISSUES SET FORTH BELOW.
If you wish to discuss or comment on any of these disclosures or discuss any aspect of your debt resolution program, please email us at info@americanfaircreditcouncil.org with your contact information and the AFCC compliance department will respond to you as quickly as possible.
- You are enrolling into a debt resolution program.
The objective of your debt resolution program is for Council Law Group to negotiate mutually agreeable resolutions between you and each of your creditor(s) for the resolution of your unsecured debt(s), which are itemized as part of your enrollment agreement and are referred to as Enrolled Debts. You understand and acknowledge that no specific results can be predicted or guaranteed.
- You will be responsible for saving sufficient funds to enable Council Law Group to negotiate debt resolutions on your behalf.
In order for Council Law Group to negotiate on your behalf, you must adhere to a regular schedule of deposits. These funds will be deposited into a separate FDIC-insured bank account that you and only you will control. Under no circumstances will Council Law Group have custody or control of the funds you set aside.
- The savings program necessary to resolve your debts is detailed in your enrollment agreement.
Summaries of the minimum monthly savings amount and the estimated period needed to resolve all of your debts have been prepared for you. Actual resolution amounts, and the period required to resolve all of your debts are likely to vary, possibly substantially, from these estimates, based on creditor behavior, your ability and willingness to keep to your deposit schedule and other factors.
- While most creditors and collectors are eager to negotiate with debt resolution providers, Council Law Group cannot force creditors to negotiate with them or to accept an offered resolution.
Communications with creditors are handled on a case-by-case basis. Some creditors may not be contacted for several months after you enroll.
- Council Law Group is not a credit counseling service and does not make regular payments on your behalf to your creditors.
Your creditors may continue to pursue collection efforts on delinquent accounts while you are enrolled in a debt resolution program. Such collection efforts can include phone calls and letters to you, sending delinquent accounts to collection agencies or even filing a lawsuit against you.
- Your debt resolution program assumes an effort that will continue for many months.
The time needed to produce a resolution of a given debt depends on several factors. These include (a) your financial hardship, (b) the age and balance of the accounts that you owe, (c) the funds you have available to pay to your creditors for a resolution and (d) the willingness of your creditors to enter into debt resolution negotiations. While no guarantees can be given, generally the more money you are able to set aside the sooner Council Law Group will be able to start negotiating resolutions for you.
- Fees paid to a debt resolution services provider such as Council Law Group are not available to pay creditors.
The fees paid to Council Law Group are intended to compensate them for their efforts and will only be refundable to the extent they have not been deemed to have been earned in the manner described in the Client Agreement. Those fees are not being set aside or held in escrow to fund debt resolutions.
- You have told us that you are in a verifiable state of financial hardship and are unable to meet, on an ongoing basis, the minimum periodic payments required by your creditors to pay off your debts.
If you do not make the minimum periodic payments on your debts your delinquencies will likely be reported to the consumer reporting agencies as late, delinquent, charged-off or past due balances. Your creditor may also raise the interest rate on your account and impose other penalties, such as late fees, over-limit fees and the like. Until your account is charged off, your account balance may continue to grow as your creditor adds accrued interest and fees and penalties, and, if negotiations are unsuccessful, you could be called upon to pay the entire balance. Even if we are successful in negotiating a less than full balance resolution for you, your creditor may report to the credit reporting agencies that the account was “resolved for less than the full amount.”
- When your creditor agrees to resolve a debt, a savings of $600 or more (meaning at least $600 less than what you owe at the time of resolution) may be reported by your creditor to the IRS as Discharge of Indebtedness income.
You should consult your tax advisor to determine whether your individual circumstances require you to include any Discharge of Indebtedness Income in your reportable income, or whether you qualify for an insolvency exclusion. For more information on tax ramifications to you personally, refer to the IRS website www.irs.gov IRS Publication 908-“Bankruptcy Tax Guide” and IRS Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness.
AFCC Summary
To summarize, each case is unique and results, dependent as they are upon both your ability to set aside sufficient funds and your creditor’s willingness to negotiate a less than full balance resolution, may be expected to vary widely. For consumers in verifiable states of financial hardship, a debt resolution program can be a very effective way to resolve unsecured debt but it is not a painless process and no guarantees as to resolution amounts or timing can be given.
Finally, we encourage you to report any concerns with your debt resolution program directly to the AFCC via email: info@americanfaircreditcouncil.org.