What is a Pennsylvania Debt Management Services Bond?
Under the provisions of the Debt Management Services Act, any debt management service provider must obtain a license and a surety bond before being able to conduct business in the State of Pennsylvania.
The Debt Management Services Bond is a license requirement where debt management services must comply with and abide by the state laws and provisions in providing lawful and ethical debt management services.
The bond guarantees financial compensation to aggrieved parties should the debt management service provider committed violations resulting from fraudulent or dishonest dealings.
Debt management services pertaining to the business of receiving funds from a consumer and then distributing those funds to creditors of the consumer in partial or full payment of the consumer’s personal debts.
What are the bond conditions?
- The Surety must be accepted and authorized to conduct business in the Commonwealth of Pennsylvania.
- The Principal (debt management services) seeking the bond must be applying for a license or renewal of a license.
- Bond claims must be brought within three years after the earlier of a final order is issued by the Pennsylvania Department of Banking revoking the license issued to the Principal pursuant to the Act or the cancellation of this bond.
- In its discretion, the Department may consent to or order pro-rata or another recovery on the bond for any harmed person if claims against the bond may or do exceed its full amount.
- The Surety may cancel the bond upon giving 30 days’ written notice of cancellation to the Department.
What is the bond amount?
The bond amount varies; it must be greater than the total amount of consumer funds that the Principal will hold directly or in trust at any time in a form acceptable to the Pennsylvania Department of Banking.
The cost of the bond is a percentage of the bond amount (which serves as your bond premium). The rate can go from 1%-5% of the bond amount. A surety underwriter will conduct an in-depth evaluation of your credit score and financial statements.
How can I obtain a Debt Management Services Bond?
Here’s a step-by-step guide to the bonding process that we have made easier so that you can get your bond in no time:
You must first apply for this type of surety bond. If you are ready to do this now, you may learn more about your bond costs and requirements by getting your FREE quote HERE!
Our expert surety bond agent will guide you through the entire process – from the time you have applied until the bond is issued to you.
Next, you will be asked to submit a few critical information that our underwriter will need to assess the following:
- Your job or business history
- Your credit score
- Your copy of the BOND FORM, which can be obtained from the Pennsylvania Department of Banking.
To avoid any delays, please make sure that you have gathered the right information needed before submitting it.
Once the underwriting process is done, we will immediately issue your bond and send it to you right away!
For further details, contact us at 800-333-7800 or shoot us an email!