Debt Management Services Bond

A Debt Management Service Bond is required for professionals or agencies before acquiring a debt management services license. Debt Management Services encompass negotiating debt terms with creditors or establishing suitable client payment plans. Debt management agencies are entrusted with the crucial task of helping individuals and organizations navigate their financial challenges. 

These bonds serve as a financial safeguard for clients and creditors alike. Regulatory authorities require debt management agencies to obtain these surety bonds to ensure that these businesses operate ethically and comply with the law. In cases of potential fraud, misrepresentation, or failure to fulfill contractual obligations, these bonds provide a safety net for those affected, ensuring they have a means of seeking compensation and financial recovery.

These bonds, also known as Debt Management Services Bonds, are referred to by various names, such as Debt Adjuster Bond, Consumer Installment Loan Act Bond, Debt Management License Bond, and Debt Management Service Provider Bond.

Quick Overview

Bond Amount: 

  • $5,000- $1,000,000
  • The bond amounts vary because some states calculate the bond amount based on the yearly disbursements of a debt management company, while others require a flat fee only.
  • In some states, a minimum $5,000 bond is mandated for new companies with no disbursement history.
  • In Michigan, the bond amount must equal the total amount of Michigan clients’ funds in the debt manager’s trust account at the time of application for license or renewal.


  • 1-5% of the bond amount, depending on credit score. The bond is paid on an annual basis
  • For example, the lowest cost for a $50,000 bond is $750 per year, which is around 1.5% a year
Example Debt Management Services Bond (VA)
Example Debt Management Services Bond (VA)

State Information

The following states require Debt Management Services Bonds:

State Bond Amount
Arizona $5,000-$25,000 - Varies based on yearly disbursements
Colorado $50,000 
Connecticut $40,000
Illinois $25,000 per licensed location
Iowa $25,000
Indiana $50,000
Kentucky $25,000
Maine $50,000
Maryland $10,000- $1,000,000 - varies based on yearly disbursements 
Michigan $25,000 to $100,000 - varies based on the dollar amount in debt manager’s trust account at the time of application or renewal.
Minnesota At least $5,000 - varies based on DOC’s assessment of business health 
Mississippi $50,000
Missouri $100,000
Montana $50,000
Nebraska $10,000
Nevada Minimum of $50,000- may change based on inflation rates
New Hampshire $25,000 for debt adjusters and $100,000 for debt adjusters who transmit money
New Jersey $50,000 plus $25,000 for each additional office location
North Dakota $50,000
Oregon $25,000
South Dakota $50,000
Vermont Minimum of $50,000 - varies on DFR’s assessment of business health
Wisconsin  $5,000 per office location



Debt Management Services Bond FAQs

What could lead to a Debt Management Claim? 

Debt Management Claims can arise from various situations, such as:

  1. Failure to Fulfill Contractual Services: If a debt management agency fails to adhere to the obligations outlined in its agreement with clients or creditors, its customers may file a claim against them. 
  2. Misrepresentation: Instances where a debt management company provides false information or misrepresents its services can lead to a claim.
  3. Fraudulent Actions: Actions that involve manipulating or inaccurately reporting clients' credit records can result in claims, usually from the regulatory agency.
  4. Improperly Receiving Money for Services: When a debt management agency unjustly receives money for services not rendered or does not disburse funds correctly, a claim may be filed against them. 

Why does this bond exist? 

Debt management bonds exist to protect consumers and ensure legal compliance. The bond serves as a safety net for consumers who may be affected by fraudulent, unethical, or dishonest practices of debt management agencies. They also ensure that debt management agencies adhere to all relevant laws and regulations, fostering transparency and accountability in the industry. 

Why is a credit check required for this bond? 

Credit checks are required for Debt Management Bonds to assess the financial stability and reliability of the principal (debt management agency). This evaluation helps surety companies determine the risk associated with underwriting the bond. A strong credit history demonstrates financial responsibility and lowers the risk for the surety, often resulting in lower bond premiums.

In some cases, the state may also conduct assessments of the financial stability of the debt management agency to determine its bond price. Check whether your state requires this above.

Who needs a Debt Management Bond? 

Companies and professionals offering debt management services to clients typically require a Debt Management Bond. This bond is a legal requirement in many states before these entities conduct business, ensuring they follow ethical and lawful practices while assisting clients with debt negotiations, financial management, and credit counseling.