Surety Bond Encyclopedia

Debt Settlement Company ($25,000) Bond - Statewide in Pennsylvania

Brief Summary

Pennsylvania licenses debt settlement and debt management as two different businesses under two different laws, and the bond follows the license. This $25,000 bond is for the settlement side, meaning firms that negotiate with unsecured creditors for a reduction in what a consumer owes on principal. The license, and its renewals, run through NMLS for the Department of Banking and Securities.

Debt settlement services providers licensed by the Pennsylvania Department of Banking and Securities under the Debt Settlement Services Act (Act 118 of 2014) file this $25,000 surety bond as part of the license. Applications and renewals are handled through NMLS. Confirm the current bond form and filing steps with DoBS before the bond is issued.

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How to Apply for a Debt Settlement Company ($25,000) Bond:

Confirm the firm's work matches the DoBS definition of debt settlement service: obtaining principal reductions from unsecured creditors.
Start the Pennsylvania debt settlement services license record in NMLS.
Use the exact legal name on the NMLS record for the bond.
Provide owner and officer information for the surety's review.
Confirm the bond form and filing steps with DoBS, then file the $25,000 bond.
Renew the license through NMLS when each renewal comes due.

Detailed Information About the Pennsylvania Debt Settlement Company ($25,000) Bond:

Settlement or management?

DoBS treats these as separate license types. It defines debt settlement service as acting as an intermediary between an individual and one or more unsecured creditors to obtain concessions that involve a reduction in principal. Debt management service is different: receiving a consumer's money periodically and distributing it to the consumer's creditors, governed by the Debt Management Services Act, Act 117 of 2008. If your firm negotiates principal reductions, this is the bond that goes with your license.

What the bond guarantees

The $25,000 bond is a surety company's guarantee that the licensee will comply with the Debt Settlement Services Act. A consumer harmed by a violation can make a claim, and the surety pays valid claims up to the bond amount, then seeks repayment from the licensee. The protection runs to consumers, not to the company that buys the bond.

Filing through NMLS

DoBS requires debt settlement applicants to use NMLS to manage their licenses, and debt settlement companies renew there as well. Confirm the current bond form and filing steps with the Department of Banking and Securities before the bond is issued, so the bond lines up with the license record in NMLS.

Before you apply

Have the company's exact legal name as it appears in NMLS, owner and officer details for underwriting, and the Pennsylvania license application started. The bond should name the same entity that is applying for the license.

Eligibility and Requirements for a Pennsylvania Debt Settlement Company ($25,000) Bond:

Bond amount of $25,000.
Pennsylvania Department of Banking and Securities as the licensing agency.
License held under the Debt Settlement Services Act, Act 118 of 2014.
Bond name matching the NMLS license record exactly.
Owner credit review as part of the surety's underwriting.

Pennsylvania Debt Settlement Company ($25,000) Bond FAQs:

Is a debt settlement license the same as a debt management license?

No. DoBS licenses them separately. Debt settlement is negotiating with unsecured creditors for a reduction in principal, under the Debt Settlement Services Act of 2014. Debt management is collecting a consumer's payments and distributing them to creditors, under the Debt Management Services Act of 2008.

Where is the license filed?

Through NMLS. DoBS requires debt settlement applicants to use NMLS to manage their licenses, and renewals are filed there too.

What does the bond cover?

It guarantees the licensee will follow the Debt Settlement Services Act. A consumer harmed by a violation can claim against it, and the surety pays valid claims up to $25,000 before recovering the money from the licensee.

What should I confirm before the bond is issued?

Confirm the current bond form and filing steps with the Department of Banking and Securities, and make sure the name on the bond matches the NMLS record exactly.