Surety Bond Encyclopedia

Collection Agency ($5,000) Bond - City of New York, NY in New York

Brief Summary

If your agency collects child support payment debts from New York City residents, this $5,000 bond is the piece DCWP will not license you without. It is a small bond with a simple underwriting file, and the signed copy plus the paid receipt go straight into your license application.

New York City requires a $5,000 surety bond from any licensed debt collection agency that collects child support payment debts, under Administrative Code sections 20-492(c) and 20-494.1. The bond names the City of New York, is filed with the Department of Consumer and Worker Protection (DCWP) with the debt collection license application, and must be paid in full and run through the end of the two year licensing period.

We can help with all New York bonds!

How to Apply for a Collection Agency ($5,000) Bond:

Complete the DCWP Debt Collection/Child Support Form and confirm the agency will collect child support payment debts in New York City.
Have the legal business name, any DBA and the premises address exactly as they appear on the license application.
Provide owner information for the surety's credit review and approve the quoted premium.
Pay the premium in full and obtain the signed $5,000 bond naming the City of New York as Certificate Holder.
Obtain the bond receipt showing payment in full and a term that does not end before the licensing period ends.
Submit the bond, the receipt, your child support disclosure form and your standard child support contract with the DCWP license application.

Detailed Information About the New York Collection Agency ($5,000) Bond:

Who posts this bond

Every business whose principal purpose is to regularly collect personal or household debts from New York City residents needs a DCWP Debt Collection Agency license, even if the agency sits outside New York State. That includes attorneys, law firms and debt buyers. The $5,000 bond is the extra step for agencies that also collect child support payment debts. DCWP asks every applicant to complete the Debt Collection/Child Support Form, and a yes answer triggers the bond along with two other documents: the disclosure form you use in the city and your standard contract for child support services.

Where the requirement comes from

Local Law 70 of 2003 added the child support rules to the Administrative Code. It says each applicant for a license to provide child support payment debt collection services shall furnish the commissioner a surety bond in the sum of five thousand dollars, payable to the City of New York. The commissioner may raise that figure by rule up to twenty five thousand dollars, and may accept a cash deposit in the same amount instead of a bond. The same law caps the agency's fee at 15% of child support collected, bars fees on current support payments, and limits contracts to 12 months with no automatic renewal.

What the bond guarantees

The bond is conditioned on compliance with the child support subchapter and DCWP rules, on payment to the city of any fine, penalty or other obligation within thirty days of its imposition, and on payment of any final judgment won by a person who used the agency's child support collection services and was damaged. The New York Insurance Department confirmed in Opinion 04-08-24 that authorized sureties may write it and that no bond form approval is required.

License term and fees

The license runs two years and expires January 31 in odd years. A new license filed between February 1 and July 31 of an odd year costs $150, and later filings in the cycle are prorated. Renewal is $150. Premium on the bond is set by the surety after reviewing the owner's credit and the agency's history, and it is charged for the full bond term.

Eligibility and Requirements for a New York Collection Agency ($5,000) Bond:

Bond amount of $5,000, payable to the City of New York.
City of New York named as Certificate Holder on the bond copy.
Corporate name, DBA and premises address matching across the bond, receipt and application.
Bond term covering the full two year license period ending January 31 of an odd year.
A debt collection agency license from DCWP, which applies to collectors located inside or outside New York.

New York Collection Agency ($5,000) Bond FAQs:

Does every NYC debt collection agency need this bond?

The bond is tied to child support payment debt collection. DCWP lists the $5,000 bond under the documents required when an agency will collect child support payment debts in New York City, along with the agency's disclosure form and standard contract.

Can I post cash instead of a bond?

Local Law 70 of 2003 lets the commissioner permit a cash deposit equal to the required bond amount. Ask DCWP before choosing that route, since the bond keeps the $5,000 in your working capital.

Can the bond amount change?

The law sets the bond at $5,000 and allows the commissioner to raise it by rule up to $25,000. Check the current DCWP checklist when you renew.

When does the license expire?

The Debt Collection Agency license runs two years and expires January 31 in odd years. Your bond must not expire before that date.