With more Americans saddled with more debt than ever before, the services of debt management, debt settlement, and credit services businesses are certain to be in greater demand. These businesses offer consumers help in planning, managing, and consolidating debt, some even acting as agents of debtors for the payment of obligations to creditors. Others focus on credit scores specifically, offering counseling and plans to increase consumer credit scores over the course of the business relationship. As debt rises, the pool of clients and the value of debt management services is likely to rise with it.
With regard to regulation, most states require debt management firms to hold a state-issued license in order to charge fees for their services. Licensing usually involves background checks for owners and officers, surety bond obtainment, and financial reviews and credit checks, with application fees ranging from several hundred to several thousand dollars depending on the state. Often, individual counselors must be licensed as well as the business entity itself. But not all states require licenses — Alabama, Massachusetts, New Mexico, and others may have regulations relevant to this industry without an actual license requirement. Still other states — Hawaii, North Carolina, and Louisiana — might prohibit debt services activities altogether.
