What Is a Maryland Debt Management or Debt Settlement Bond?
Maryland debt management and settlement license surety bonds protect consumers from unfair or unethical debt management practices. The bond terms prohibit providers from engaging in fraud or misrepresentation while dealing with clients.
These bonds are required for licensing with the Maryland Office of the Commissioner of Financial Regulation.
How Much Do Maryland Debt Management Bonds Cost?
Maryland debt management bond requirements vary based on the annual volume of payments to creditors on behalf of Maryland consumers, as follows:
- $240,000 or less: $10,000 bond
- $240,000-$600,000: $25,000 bond
- $600,000-$1,200,000: $50,000 bond
- $1,200,000-$1,800,000: $75,000 bond
- $1,800,000-$2,400,000: $100,000 bond
- $2,400,000-$4,800,000: $200,000 bond
- $4,800,000-$9,600,000: $400,000 bond
- $9,600,000-$14,400,000: $600,000 bond
- $14,400,000-$19,200,000: $800,000 bond
- $19,200,000+: $1,000,000 bond
Verify your bond coverage amount with the state before purchasing. Bond rates typically start at 1–2% for qualified applicants. Request a free quote today for your personalized price.
How Much Do Maryland Debt Settlement License Bonds Cost?
The state mandates a $50,000 debt settlement services license bond which also requires underwriting review to determine pricing. You can expect to pay a premium rate of 1–10%, depending on credit score.
That means you could pay as low as 1% or $500 with strong credit. Apply for a free quote below.
Learn more about how surety bond rates are calculated here.
How Does a Maryland Debt Management/Settlement License Bond Work?
A Maryland debt management or debt settlement license bond joins three parties in a legally-binding contract:
- Principal: The debt management/settlement services provider
- Obligee: The Maryland Office of the Commissioner of Financial Regulation
- Surety: The surety bond provider
The obligee requires the bond from the principal (debt services provider) and the surety backs the principal’s obligation. If the bonded principal causes damages or breaks the bond terms, the bond acts as a line of credit to pay harmed parties. However, the principal must reimburse the surety for any claims.
Who Needs a Debt Management or Settlement License Bond?
Debt Settlement Licensees
Any entity soliciting or providing debt settlement services to Maryland residents must be bonded before doing business in the state. This includes debt settlement, adjustment and negotiation service providers.
Debt Management Services Licensees
Any entity that receives funds from clients in Maryland and distributes payments to their creditors to fulfill an obligation is considered a debt management services business.
If you perform any of the following activities, you must be licensed and bonded with the state per Maryland Code Ann., Fin. Inst. § 12-901:
- Bill paying
- Debt management/credit counseling
- Debt negotiation
- Debt settlement/debt adjuster
- Non-mortgage loan modifications
If you work as a mortgage lender, we also issue Maryland mortgage lender licensee bonds.
How to Get a Debt Management/Settlement License Bond in Maryland
SuretyBonds.com provides the fastest and easiest way to get a Maryland debt management or settlement services license bond. Just follow these quick steps:
- Apply: Complete the online application form.
- Quote: Receive a free quote within one business day.
- Checkout: Purchase your bond and e-sign the indemnification agreement.
We’ll upload the bond directly to the NMLS on your behalf and email you a copy for your records.
How to Get a Debt Management License in Maryland
To get your Maryland debt management license, you’ll need to apply through the NMLS and submit the materials listed below.
Fees
- $500 minimum license fee
- $1,000 state application investigation fee
- $36.25/person criminal background check
Documents and Forms
- Company form MU1 with supporting documents attached
- Individual form MU2 with supporting documents attached
- Audited financial statements illustrating company net worth of $50,000+
- Minimum $10,000 electronic surety bond
- Detailed business plan
- Certificate of Authority/Good Standing from the state
- Company staffing and internal policies documentation
- IDFPR-specific Debt Management Agreement
- Company formation documents
- Organization chart
See more details in the resources linked below.
How to Get a Debt Settlement Services License in Maryland
To get your Maryland debt settlement license, you’ll need to apply through the NMLS and submit the following materials:
- $400 registration fee
- Company form MU1 with supporting documents attached
- Individual form MU2 with supporting documents attached
- $50,000 electronic surety bond
- Detailed business plan
- Certificate of Authority/Good Standing from the state
- Company formation documents
See more details in the resources linked below.
More Resources
- Maryland.Gov: Debt Settlement Services Providers - Financial Regulation
- NMLS MD Debt Settlement Services Provider Registration New Application Checklist
- Maryland.Gov: Debt Management Services Providers - Financial Regulation
- NMLS MD Debt Management Services Provider Registration New Application Checklist (Company)
