You can cancel Five Lakes Law Group at any time, without a penalty, and the firm has to return any money still sitting in your dedicated savings account within seven business days of your request. Federal rules governing for-profit debt relief protect that right no matter what your contract says. The work is in doing it cleanly: notify the firm in writing, pull your funds from the third-party account administrator, take back contact with your creditors, and watch for the lawsuit, tax, and credit issues that can follow you out the door.
Your Right to Cancel Without a Penalty
The FTC’s Telemarketing Sales Rule covers for-profit debt relief services and prohibits them from charging fees before they have actually settled or reduced at least one of your enrolled debts.1eCFR. 16 CFR 310.4 – Abusive Telemarketing Acts or Practices The same rule requires that you be allowed to withdraw at any time without penalty.
If Five Lakes has not yet settled any of your debts, you should not have been charged performance fees at all. If one or more debts were settled, the firm may keep fees proportional to the work completed on those specific accounts, and nothing beyond that. A contract clause that contradicts those federal protections is unenforceable, so read your retainer for the firm’s stated termination process but do not treat a quoted cancellation fee as something you owe.
How to Cancel
Start with a phone call to put the firm on notice. Five Lakes’ customer service line is (855) 441-6129, open 7 AM to 9 PM CT on weekdays and 8:30 AM to 5 PM CT on weekends. The firm’s email is info@fivelakeslawgroup.com and its mailing address is 26711 Northwestern Hwy., Ste. 350, Southfield, MI 48033.
Then follow up in writing. Send a cancellation letter by certified mail with return receipt requested so you have proof the firm received it; a return postal receipt serves as legal proof of service.2eCFR. 45 CFR 1149.16 – What Constitutes Proof of Service Include your full name, account number, enrollment date, and a clear statement terminating all services effective immediately. Keep a copy.
A representative will likely call to ask why you are leaving or try to keep you in the program. You are not obligated to explain. Insist on written confirmation that the cancellation is complete and no further fees will be charged. If drafts keep hitting your account later, that confirmation is your evidence.
Getting Your Dedicated Account Funds Back
Your monthly deposits do not go to Five Lakes. They go to a dedicated savings account managed by a third-party processor, and you own every dollar in it, including accrued interest. Under the Telemarketing Sales Rule, once you cancel the debt relief provider has to return all funds in the account (minus any legitimately earned fees) within seven business days of your request.3Federal Trade Commission. Debt Relief Services and the Telemarketing Sales Rule – A Guide for Business
Contact the account administrator separately from Five Lakes. Your enrollment paperwork or recent account statements will name the processor. Request an account closure form, verify your balance, and confirm where the refund will be sent. Watch your bank statements for the next few weeks to make sure automatic drafts have stopped and no monthly maintenance fees keep posting after closure. If they do, that is a violation worth reporting to the CFPB or your state attorney general.
Tell Your Creditors Yourself
When you enrolled, Five Lakes almost certainly sent letters to your creditors directing them to communicate through the firm rather than contact you. Canceling revokes any power of attorney you granted and ends that arrangement. Your creditors regain the right to call you directly, and some will not realize anything has changed until you tell them.
Reach out to each creditor individually. Ask for the current balance, any fees and interest accrued during your enrollment, and what payment options they can offer. Document each call: date, representative’s name, what was said. Creditors still routing mail to Five Lakes may send important notices (including notices of a pending lawsuit) to the wrong place, and the paper trail protects you if that happens.
Lawsuit Risk After You Leave
This is the part people underestimate. Debt settlement programs typically tell clients to stop paying creditors while the firm negotiates. Those missed payments do not pause your creditors’ legal rights. A creditor can sue at any time during or after your enrollment, and many do once payments have been missed for months. Canceling does not change that risk, but it does mean nobody is monitoring collection activity on your behalf anymore.
If a creditor already filed a lawsuit or obtained a judgment, leaving Five Lakes does not make it go away. You need to answer any pending filing personally or hire your own attorney. Ignoring the case leads to a default judgment, which can mean wage garnishment or bank levies depending on your state.
Be careful about how you talk to creditors on old debts. Making a partial payment or even verbally acknowledging that you owe the debt can restart the statute of limitations on collection lawsuits in many states.4Consumer Financial Protection Bureau. Can Debt Collectors Collect a Debt Thats Several Years Old If any of your accounts are old enough that the statute may have expired, get legal advice before contacting that creditor or sending any money.
Taxes on Debts Already Settled
If Five Lakes settled one or more of your debts for less than the full balance before you canceled, the forgiven amount is generally taxable. The IRS treats canceled debt as income.5Office of the Law Revision Counsel. 26 USC 61 – Gross Income Defined Any creditor that cancels $600 or more is required to send you a Form 1099-C and file a copy with the IRS.6Internal Revenue Service. Publication 4681 – Canceled Debts, Foreclosures, Repossessions, and Abandonments Even without a 1099-C, you still have to report the forgiven amount.
There is a significant exception. If your total liabilities exceeded the fair market value of your assets immediately before the debt was canceled, you qualify as insolvent under the tax code and can exclude the forgiven amount from income up to the amount by which you were insolvent.7Office of the Law Revision Counsel. 26 USC 108 – Income From Discharge of Indebtedness Many people in debt settlement qualify. To claim it, file IRS Form 982 and keep records showing your assets and liabilities as of the day before each settlement. IRS Publication 4681 has a worksheet for the calculation.6Internal Revenue Service. Publication 4681 – Canceled Debts, Foreclosures, Repossessions, and Abandonments
One boundary: settlements completed before you canceled are binding contracts between you and that creditor. Those agreements survive your decision to leave the program.
What Canceling Does and Does Not Do to Your Credit
Your credit has likely already been hit. Programs like this ask clients to stop paying while negotiations proceed, and those missed payments report to the bureaus. Late and missed payments stay on your report for seven years and weigh heavily on your score because payment history is the single largest scoring factor.
Canceling does not erase the damage, but it does let you stop adding to it. Resuming payments to your creditors, even reduced ones under a direct arrangement, rebuilds your history one month at a time. Accounts already settled will show as “settled” rather than paid in full, which future lenders may view negatively, but a settled account is generally better than one still growing in delinquency.
After you cancel, pull your free reports from all three bureaus and check for errors. If a creditor Five Lakes settled with is still reporting the full original balance, dispute it with documentation of the settlement.
Alternatives if the Program Was Not Working
If you are leaving because the program was too expensive or too slow, nonprofit credit counseling is worth a look before trying to go it alone. A counselor can set up a debt management plan where you make a single monthly payment and the agency distributes it among your creditors. Unlike debt settlement, counselors do not tell you to stop paying; they negotiate lower interest rates and waived fees instead of trying to shrink the principal.8Consumer Financial Protection Bureau. What Is the Difference Between Credit Counseling and Debt Settlement, Debt Consolidation, or Credit Repair Because payments keep flowing, the credit damage is usually smaller.
If your situation has stabilized, call each creditor directly and ask about hardship programs or payment plans. Many prefer working with you over selling the account to a collector. Come in with a specific offer and a realistic budget. Direct conversations with a creditor often produce better terms than routing everything through a third party that charges a percentage of whatever it saves you.