The Uniform Debt-Management Services Act is a law adopted in Colorado and many other states to create uniform regulations for fair and effective debt management services. Adopted in 2009, the UDMSA became an important law to have in place when 2005 changes to U.S. bankruptcy laws required all debtors who wanted to apply for any type of bankruptcy to seek consumer debt counseling or management services. This, in turn, sparked many private debt management services to pop up, and without regulations in place, many of these companies adopted unethical and, at times, predatory behaviors that ultimately ended up hurting struggling debtors and putting them in an even worse financial state.
With the UDMSA in place, however, there are now regulations governing how these agencies are required to officially register their businesses and provide contractual services to their clients. Additionally, the UDMSA sets for a series of potential penalties that can be levied on debt management agencies that violate the UDMSA.
What Debt Management Agencies Must Do, According to the UDMSA
The UDMSA requires debt management companies in Colorado to:
- Register as a consumer debt management service and to renew this registration each year
- Carry insurance against fraud and theft
- Fully disclose the company’s service terms, including its fees and potential penalties that can befall consumers who violate their contracts
- Provide credit or debt counseling through a certified specialist
- Give debtors a three-day window during which they are allowed to rescind their contract if they change their minds about wanting to use the debt management company’s services
- Keep payments for their clients’ creditors in a trust account
If you are overwhelmed by seemingly insurmountable debt and are looking for a financial fresh start, contact the trusted Colorado debt relief and bankruptcy lawyers at the Law Office of Jon B. Clarke, P.C. before entering into any contracts with a debt management agency. Our experienced legal professionals are committed to providing each of our Clients with the debt relief assistance they need, and we will work tirelessly to ensure that our Clients’ cases are resolved as favorably and efficiently as possible. For a thorough assessment of your situation, along with expert advice regarding the best manner in which to move forward to unburden yourself from debt, call us at (866) 916-3950.