Connecticut Debt Adjuster Bond

Comprehensive Guide to Connecticut Debt Adjuster Bonds

There are two types of Connecticut Debt Adjusters, both requiring a minimum $40,000 Connecticut Debt Adjuster Bond. they are for profit and “Bona fide nonprofit organization”.  The license administration is managed via the Nationwide Mortgage Licensing System (NMLS) and Surety1.com will file the bond electronically with the NMLS. The cost of the surety bond is usually between 1% and 3% of the bond amount.

How to Get a Connecticut Debt Adjuster Bond

At Surety1.com we make it easy to obtain this surety bond. Our simple, three step process is:

1. Complete the easy to navigate and secure online application. ¹
2. Review the free, no obligation quote from one of Surety1’s professional surety bond agents, usually within one business day.
3. Sign some paperwork and pay the bond premium

Once these steps have been completed, the Connecticut Debt Adjuster Bond will be filed electronically with the NMLS.
^{1 -The name of the applicant on the surety bond application must match exactly the full legal business name of applicant for the license.} 

Surety1.com is a service of AssuredPartners one of the largest and fastest growing insurance agencies in the nation. Representing over a dozen surety bond companies, Surety1.com is the premier online provider of surety bonds nationwide since 2003.

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Introduction to Debt Adjuster Bonds in Connecticut

In Connecticut, debt adjusters play a crucial role in helping consumers manage their financial obligations through debt management plans (DMPs). To protect consumers and ensure ethical business practices, the state requires debt adjusters to obtain a surety bond as part of their licensing requirements.

This comprehensive guide will walk you through everything you need to know about Connecticut Debt Adjuster Bonds, including legal requirements, application processes, bond amounts, and compliance obligations.

Understanding Debt Adjustment in Connecticut

Debt adjusters in Connecticut are agencies that offer services including:

• Administration of Debt Management Plans (DMPs)
• Receiving monthly deposits from consumers
• Distributing payments to unsecured creditors (credit cards, student loans, medical bills)

All debt adjustment activities in Connecticut must be performed by organizations licensed by the Banking Commissioner, with strict consumer protections in place.

Legal Requirements for Debt Adjuster Bonds

Statutory Basis

Connecticut General Statutes §§ 36a-655 to 36a-665 govern debt adjuster licensing and bonding requirements . Key provisions include:

• Section 36a-656: License requirements and fees
• Section 36a-664: Bond requirements for debt adjusters 10

Who Needs the Bond?

Any person or entity engaging in debt adjustment business in Connecticut must obtain both a license and the required surety bond, unless exempt. The following are exempt for the license and surety bond requirement:

• Any attorney admitted to the practice of law in this state who engages in debt adjustment as an ancillary matter to such attorney’s representation of a client;
• Any bank, fiduciary or financing or lending institution authorized to transact business in this state or any other state, which performs debt adjustment in the regular course of its principal business;
• Any title insurance or abstract company authorized to transact business in this state or any other state, while doing an escrow business; and
• Any person acting pursuant to any law of this state or of the United States or acting under the order of a court.

Connecticut Debt Adjuster Bond Specifications

Bond Amounts

The bond amount varies based on the debt adjuster’s business volume:

$40,000 minimum bond. If you have acquired the business of a predecessor debt adjuster, the bond amount is the greater of: (a) $40,000; or (b) the lesser of: the amount that is twice the amount of the average daily balance of the payments received by the predecessor from Connecticut debtors in connection with the predecessor’s debt adjustment activity during the preceding twelve months ending July thirty-first; to a maximum amount of $1 million dollars

Purpose of the Surety Bond

The bond serves to:

• Protect consumers from fraudulent or unethical practices
• Ensure compliance with Connecticut debt adjustment laws
• Provide financial recourse for harmed consumers 410

Bond Term

The standard bond term is 12 months, aligning with the license renewal period

Maintaining Your Bond Compliance

Renewal Requirements

• Bonds must be renewed annually with your license. Surety1 will provide renewal reminders.
• Failure to maintain bond coverage can result in license suspension

Handling Claims on your Bond

If a claim is made against your bond:

• The surety company will investigate.
• If valid, the surety will pay up to the bond amount.
• You must reimburse the surety for any claims paid.

Consumer Protections Related to the Bond

The bond ensures debt adjusters:

• Provide written agreements detailing services and fees.
• Offer free credit counseling before agreements.
• Verify debtor financial ability for proposed plans.
• Make timely payments to creditors.
• Provide quarterly account statements.

Consequences of Non-Compliance

Operating without the required bond can result in:

• License denial or revocation
• Civil penalties
• Criminal charges in severe cases
• Voiding of debt adjustment agreements.

Additional Resources

For more information:

Connecticut Department of Banking: 860-240-8200 or 800-831-7225

NMLS Call Center: (855) 665-7123

Frequently Asked Questions

Q: How long does it take to get a Connecticut Debt Adjuster Bond?
A: Typically 1-3 business days once approved, sometimes instantly 612.

Q: Can I get a bond with bad credit?
A: Usually yes, but premiums may be higher.

Q: What’s the difference between for-profit and nonprofit debt adjuster bonds?
A: Nonprofits have different licensing fees but similar bonding requirements .

By understanding and complying with Connecticut’s debt adjuster bonding requirements, you can establish a legitimate business that helps consumers while protecting their financial interests. Always consult with the Connecticut Department of Banking or a surety bond professional for the most current information.

The information provided above is for general informational purposes only and does not constitute legal advice.  Do not rely solely on the information presented here as a substitute for professional legal counsel.