Virginia Debt Settlement Services Provider Continuous Surety Bond
Who needs a Debt Settlement Services Provider Bond? [And what does it cover?]
Debt Settlement Services providers must be licensed and bonded with the state to legally conduct business in Virginia. These requirements apply to all financial service professionals engaging in negotiating partial debt forgiveness or reducing charges, fees or payments on behalf of consumers.
The Virginia State Corporation Commission (SCC) issues licenses to financial services professionals to ensure they perform their jobs ethically and honestly. Through purchasing a surety bond, you are guaranteeing to the Commission you will follow all the rules and regulations they have set for licensed financial services professionals.
These rules include not accepting a fee from consumers before providing services and not engaging in deceptive advertising practices. Please see VA HB 1553 for more regulations. Failure to uphold your agreement with the Commission could result in a claim against your bond.
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What happens if I get a claim on my bond?
The important distinction between a surety bond and your standard insurance policy is that the surety bond doesn’t provide coverage for you. Instead, the bond is coverage for your clients and protects them if you engage in dishonest business practices.
If a client of yours makes a claim against your bond, the surety company will conduct an investigation to determine the validity of the claim. The surety will only pay out on valid claims and will not pay more than the amount of your bond. As the principal of the bond, you’re responsible for repaying the surety back in full.
How much does the bond cost? [Does it expire?]
The cost of your bond is largely based on the necessary bond amount the obligee (the Commission) sets for you. They will enforce a bond amount of $25,000 or more, but will not exceed $350,000. However, the cost of your bond is significantly less than your bond amount. Applicants with good credit can expect to pay around 1% – 3% of the full bond amount.
This is a continuous bond, so it will not expire and remains active until canceled. However, you must renew your bond with the surety at the end of the bond’s term, which is typically annually. Failure to make payment to the surety at renewal will result in the surety canceling your bond with the Commission. Without an active surety bond, the Commission will revoke your license.
What if my credit is bad? Can I still get a bond?
Is your credit not the best at this time? That’s okay! You may still be eligible for a surety bond. When you submit our easy online bond application, we’ll conduct a soft pull on your credit. Meaning, your credit score isn’t adversely affected by our credit check. Applicants with non-standard credit typically receive quotes in the range of 5%-15%, if approved.
Virginia Debt Settlement Services Providers License Guide
Debt Settlement Services Providers must receive a license through the commission to legally operate in the state of Virginia. Follow these guidelines from Virginia House Bill 1553 to get your license.
- Complete a license application and include the following information.
- Company type
- Names and addresses of partners, members, directors, registered agents, principals, trustees and/or beneficiaries
- Name and address of all managers and officers
- Business address or addresses
- Your financial statements
- Copy of your latest standard debt settlement services agreement
- Any additional information the Commissioner may require, including related experience and background checks
- Pay non-refundable $500 application fee
- Purchase a continuous surety bond with a bond amount set at $25,000 to $350,000 (Bond amount set by the Commission)
- Purchase a Fidelity Bond (Amount set by the Commission)
Where to get a Surety Bond in Virginia?
Get your VA Debt Settlement Services Provider Continuous Surety Bond quotes quickly and easily online at Surety Solutions, A Gallagher Company. Our leading surety bond partners offer competitive quotes. Allowing us to bring you the best value for your bond.
We’re licensed to issue surety bonds in the state of Virginia and the rest of the The U.S. Our staff of surety experts looks forward to helping you with your free, no-obligation quotes and with any of your surety bond questions.
Need a bond outside of Virginia?
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