License & Permit
Debt Settlement Bond
A debt settlement bond is a license bond some states require from companies that negotiate with creditors to settle a consumer's debts for less than the full balance.
- Required by
- State financial regulators (for example, the Virginia State Corporation Commission)
- Bond amount
- Set by whoever requires the bond. We confirm it.
What this bond guarantees
The bond promises the state, for the benefit of consumers, that the company will follow the state's debt settlement law. A person harmed by the company's failure to comply can sue on the bond. Claims often involve fees taken without settling debts or funds that were mishandled.
Who needs it
- Debt settlement companies
- Debt relief companies that negotiate with creditors
- Firms licensed under a state debt settlement or debt management law
What the underwriter looks at
- Personal credit of the owners
- Company financial statements
- Complaint history
- Amount the regulator sets
Requirements vary by state and by who asks for the bond. Send us the request you received and we will confirm exactly what it calls for.
Common questions
How much is the bond?
It depends on the state. Virginia sets it between $25,000 and $350,000, and the Commission picks the exact amount.
Who can make a claim?
In Virginia, any person damaged by the licensee's noncompliance with a bond condition can sue on the bond.
Do I need one in every state where I have clients?
Often, yes. States that regulate debt settlement usually require a license and bond to serve their residents, even if your office is elsewhere.