American Fair Credit Council Applauds Ohio Legislation

“For decades, debt settlement has offered a safe and proven option for Americans experiencing financial hardship,” said AFCC CEO Denise Dunckel. “Debt settlement providers help their clients get out of debt faster, for less than they owe, by negotiating with their unsecured creditors and creating a monthly payment they can afford, saving American families more than a billion dollars annually. If passed, this bill will allow Ohioans the opportunity to take advantage of this critically-important financial tool.”

Debt settlement companies have been offering their services for the better part of two decades across the country, including in neighboring states such as Michigan, Indiana, Kentucky, and Pennsylvania. This service works by allowing consumers to partner with a debt settlement provider of their choosing, who negotiates, on their behalf, with their unsecured creditors, to lower the amount owed. The typical debt settlement client owes more than $25,000 in unsecured debt which they can no longer afford to repay due to a financial hardship, such as a household loss of income or unexpected medical event.

Across debt settlement providers, independent analyses show that nearly all offered settlements – over 98 percent – result in a decrease of the client’s debt that is greater than the accompanying fees and, for each $1.00 in charged fees, the consumer receives $2.64 in savings. These studies have also demonstrated that if Ohio opens the door to debt settlement, the industry would be responsible for an increase of over one thousand jobs in Ohio and an associated total economic output in the state of more than $200 million. Furthermore, these analyses project that unfettered access to debt settlement in Ohio would yield approximately $128.8 million in total settled debt and more than $84.5 million in consumer savings. AFCC member companies saved Americans more than $1.6 billion in 2019.

Once enrolled, clients are presented with a personalized plan to chart their way back to financial stability, while the company begins the negotiation process with their creditors. Under strict Federal Trade Commission rules, the consumer is not charged any fee until the company settles one of their debts, the consumer accepts that settlement, and then they make a payment towards that settlement, ensuring that debt settlement remains one of the most consumer-friendly options in the financial space.

To learn more about how debt settlement works to help consumers facing financial hardship, click here.

About the American Fair Credit Council

The American Fair Credit Council (AFCC) is the national association of professional debt settlement companies. The AFCC and its member companies work on behalf of consumers struggling with overwhelming burdens of unsecured debt to settle those debts for less than their full balance. The AFCC has developed a strict Code of Conduct centered on “best practices” designed to protect the rights of consumers and requires member companies to follow stringent regulatory guidelines for operation. All AFCC members operate on a “No Advance Fee Model” and never charge a fee for services until a consumer’s debt has been successfully negotiated.