Credit Counselor Licensing

In Montana, two types of credit counseling services must be licensed:

• pre-bankruptcy credit counseling
• debt management plan services

Pre-Bankruptcy Credit Counseling

To file bankruptcy, an applicant is usually required to go through pre-bankruptcy credit counseling. Pre-bankruptcy credit counseling services are licensed by the United States Department of Justice. Further information about the credit counseling agency application process is available from the U.S. Trustee Program.

Debt Management Plan Services

A debt management plan is a written agreement under which a consumer makes regular payments to a credit counseling service. The credit counseling service then distributes that money to one or more of the consumer's creditors as full or partial payment of what the consumer owes.

Licensing Required – Under Montana law, any credit counseling or debt settlement company that wants to provide debt management plans in Montana must be licensed by the Montana Department of Justice and pay the annual $5,000 licensing fee, renewable by February 1 each year. Debt management companies in Montana may be for-profit or nonprofit entities.

Businesses that currently offer debt management plans but do not plan to become licensed in Montana have until February 1, 2007 to let their Montana customers cancel or complete their plans, or switch to a licensed provider. In addition, such businesses must:

• notify the Office of Consumer Protection in writing and provide a list of all existing Montana customers
• not enroll any additional Montana customers

How to Become Licensed to Provide Debt Management Services

1. Complete the Debt Management Licensing Application and enclose:
   • the annual $5,000 license fee payable to the State of Montana
   • the $50,000 Surety Bond Form, completed by a bonding company
   • a Certificate of Compliance, which is required for each individual who completes any portion of this application process. This certificate must be notarized.
2. Mail the completed package to:
   Office of Consumer Protection
   2225 11th Avenue
   P.O. Box 200151
   Helena, MT 59620-0151

If a business that has been operating in Montana has incurred any civil fines related to its debt management services, the business must pay those fines before it can become licensed.

Penalties – There are civil penalties for failing to get the necessary license. Contact the Office of Consumer Protection at (406) 444-4500 with any questions.

Exemptions – Section 30-14-2002 of the Montana Code Annotated exempts certain professions from these licensing requirements:

• banking institutions, building and loan associations, credit unions, escrow businesses or title companies
• attorneys, if providing credit counseling services is incidental to and not their principal business
• certified public accountants, if providing credit counseling services is incidental to and not their principal business
• debt collectors who do not advertise or portray themselves as a credit counseling service