Montana Code 30-14-2102. Requirements for debt settlement providers
30-14-2102. Requirements for debt settlement providers. (1) (a) A debt settlement provider shall maintain insurance coverage for dishonesty, fraud, theft, and other misconduct on the part of directors, officers, employees, or agents that is issued by an insurer rated at least A- or its equivalent by a nationally recognized rating organization. The debt settlement provider shall, at the request of the attorney general, make available to the attorney general proof of the insurance coverage required by this subsection (1)(a).
Terms Used In Montana Code 30-14-2102
- 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.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Debt settlement provider: means any person or entity engaging in or holding itself out as engaging in the business of debt settlement for compensation that does not in the usual and regular course of business hold, receive, or disburse a debtor's funds in connection with debt settlement services. See Montana Code 30-14-2101
- Fraud: Intentional deception resulting in injury to another.
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See Montana Code 1-1-201
- Writing: includes printing. See Montana Code 1-1-203
(b)The insurance coverage must be in a minimum amount of $100,000 with a deductible of not more than $10,000. A debt settlement provider is required to give at least 30 days’ advance written notice to the attorney general if the coverage is being replaced.
(2)(a) A debt settlement provider is required to maintain books and records in accordance with generally accepted accounting principles and file a financial statement annually with the attorney general. The attorney general may require an audit or review of the financial statement by an independent certified public accountant.
(b)The annual filing by the debt settlement provider must be accompanied by a filing fee of $250 and must include, in addition to the financial statement, the following:
(i)the name of the debt settlement provider;
(ii)the date of formation if the debt settlement provider is an entity;
(iii)the physical address of each location to be operated by the debt settlement provider;
(iv)the name and resident address of the owners or partners or, if the debt settlement provider is a corporation, limited liability company, or association, the name and resident address of officers, directors, trustees, and managers; and
(v)any other pertinent information required by the attorney general.
(c)Fees received pursuant to this section and any civil fines, fees, costs, or penalties received or recovered by the department of justice pursuant to 30-14-2104 must be deposited into a state special revenue account to the credit of the department of justice and must be used to defray the expenses of the department in discharging its administrative and regulatory powers and duties in relation to this part. Civil penalties, costs, or settlements received by a county attorney must be paid to the general fund of the county in which any enforcement action was commenced.
(3)(a) A debt settlement provider shall disclose in writing to a debtor, prior to entering into an agreement to provide services to the debtor, that:
(i)there will be fees charged by the debt settlement provider and shall disclose the type and amount of all of those fees;
(ii)the settlement of debts through a debt settlement program might have an impact on the debtor’s credit history;
(iii)there may be tax consequences for the debtor as a result of a debt settlement;
(iv)collection activity by the creditor for a debt may continue until the creditor accepts a settlement for that debt;
(v)any settlement amount is an estimate based on the experience of prior customers and is not guaranteed to be accepted by the creditor;
(vi)a creditor may not be forced to accept a proposed settlement;
(vii)the debtor is required to meet certain savings goals in order to maximize settlement opportunities;
(viii)the debt settlement provider does not provide legal, accounting, tax, or bankruptcy advice or assistance;
(ix)the debt settlement provider will not use a payment made by the debtor to make a payment to a creditor; and
(x)debt settlement may not be the only option available to the debtor.
(b)The written disclosure must be in a minimum size of 12-point type.