Reminder on Minnesota Debt Settlement Rules and Summary

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06 Feb 2023

Reminder on Minnesota Debt Settlement Rules and Summary

Dear Debt Settlement Industry Stakeholders,

Recently, I have noticed that Minnesota is increasing reviews of licensed and unlicensed companies. Minnesota has two separate agencies that impact debt settlement companies, dedicated account providers, sales front-ends and vendors. Those agencies are the Minnesota Department of Commerce and the Minnesota Attorney General's Office.

Minnesota has a debt settlement licensing law. As such, and continuing in the updates I am sending out, I am providing this helpful summary of Minnesota consumer agreement requirements. 

The below is not comprehensive, and not legal advice. It is an educational summary, and I encourage you to call me if you have questions as Minnesota is a high-stakes, high enforcement state for both regular debt settlement and legal models.


Debt Relief Agreement, Select Requirements:

  • The Agreement must be in writing, dated and signed by the debt management services provider AND the consumer. The agreement must be fully executed by both parties.

  • The Agreement must conspicuously indicate whether or not the company is registered with the Minnesota Department of Commerce and include the registration number.

  • The Agreement must be written in the consumer’s primary language if the company advertises in that language.

  • The company must furnish the consumer with a copy of the fully executed Agreement.

Actions Prior to Written Agreement:

  • The company must provide the consumer with individualized counseling and educational information that, at a minimum addresses:

    • Managing household finances

    • Managing credit and debt

    • Budgeting

    • Personal savings strategies

  • The company must make a determination supported by the written financial analysis that the consumer can reasonably meet the requirements of the proposed Program and that there is a net tangible benefit to the consumer entering into the proposed Program.

  • The company must prepare a written list for the consumer’s reference identifying all known creditors that the company reasonably expects to participate in the plan and the creditors, including secured creditors that the company reasonably expects not to participate.

  • Disclose, in addition to the written disclosure on the Agreement, whether the company is registered with the Minnesota Department of Commerce.

Some of the Required Agreement Terms (not all listed here):

  • All fees to be paid by the consumer, and a total amount of expected program fees.

  • A disclosure that if the amount of debt owed is increased by interest, late fees, over the limit fees, and other amounts imposed by the creditors, the length of the Agreement will be extended and remain in force and that the total dollar charges agreed upon may increase at the rate agreed upon in the original Agreement.

  • A prominent statement describing the terms upon which the consumer may cancel the Agreement as set forth in Section 332A.11:

    • Debtor's right to cancel and the state required language.

    • Notice of debtor's right to cancel. (a different statement than above).

    • Automatic termination notice per Minnesota law.

    • Provider’s right to cancel.

  • A detailed description of all services to be performed by the company for the consumer.

  • The company’s refund policy.

  • The company’s principal business address and the name and address of its agent in the state authorized to receive service of process.

Prohibited Agreement Terms:

  • A hold harmless clause.

  • A confession of judgment, or a power of attorney to confess judgment against the consumer or appear as the consumer in any judicial proceeding.

  • A waiver of the right to jury trial in any action brought by or against a consumer.

  • An assignment of or an order for payment of wages or other compensation for services.

  • A provision in which the consumer agrees not to assert any claim or defense arising out of the debt management services agreement.

  • A waiver of any provision of the Minnesota statutes or a release of any obligation of the company to comply with the obligations.

  • A mandatory arbitration clause.

  • A clause selecting a law other than the laws of Minnesota or a venue other than the state of Minnesota under which the company agreement or any other dispute involving the provision of services is governed or enforced.

Modifications of Existing Agreements:

  • Any modification of an existing Agreement, including any increase in the number or amount of debts included in the Program, MUST be in writing and signed by BOTH parties, except that the signature of the consumer is not required if:[omitted].

Fee Restriction:

  • Minnesota imposes a limitation on program fees and required disclosure relating to such.


If you have questions, please call me directly at (954) 343-6959.


Robby H. Birnbaum, Esq.

Greenspoon Marder LLP

100 West Cypress Creek Road, Suite 700

Fort Lauderdale, Florida 33309

Direct Telephone: (954) 343 6959

Direct Facsimile: (954) 343 6960