Arizona Revised Statutes § 6-709 Requirements

6-709. Requirements

A. A licensee at all times shall maintain minimum liquid assets of at least two thousand five hundred dollars in excess of his business liabilities and of his liabilities on account of monies received in the business of a debt management company. The superintendent may determine by general rule what assets are liquid assets within the meaning of this section and may determine by specific ruling or demand that a particular asset is or is not a liquid asset within the meaning of this section.

B. A licensee shall make a written contract between himself and a debtor and immediately furnish the debtor with a copy of the completed contract. The licensee shall concurrently furnish the debtor with a list of the creditors, as of the time of the signing of the contract, with whom he agrees to manage the debtor's obligations. All contracts shall contain a provision allowing the termination of the contract by either party at any time. Such termination shall be without penalty, except that the licensee shall retain the retainer fee if the termination is by the debtor. Termination shall only be upon a five-day notice to the other party.

C. The basis of fees charged to a debtor by a licensee for assuming the responsibility of debt management shall be agreed upon in advance and clearly stated in the contract. The fees charged to a debtor shall not exceed:

1. A retainer fee of thirty-nine dollars.

2. Three-quarters of one per cent of the total indebtedness or fifty dollars, whichever is less, may be charged monthly and shall be due and payable at the time such deposited funds are remitted to the creditors. Unusual and necessary " out of pocket" expense items by the licensee may be charged to the debtor's account if the incurrence of the expense has advance written approval of the debtor and superintendent.

D. The total debt shall be calculated not less often than annually and the charges adjusted based on the new total debt. Any fees charged by the licensee shall not be based on a total debt which includes a mortgage on the residence or a rent payment as a liability or a debt.

E. A licensee shall not be entitled to any fee until he has given notice of the debt management contract to all creditors listed in the application form.

F. A licensee shall make remittances to creditors within seven days after receipt of any funds, unless the reasonable payment of one or more of the debtor's obligations requires that such funds be held for a longer period so as to accumulate a certain sum.

G. A licensee shall upon request furnish the debtor with a written statement of his account each month or a verbal accounting at any time the debtor may request it during normal business hours.

H. A licensee shall, if a compromise of a debt is arranged by the licensee with any one or more creditors, allow the debtor the full benefit of that compromise.

I. A licensee shall maintain a trustee checking account in a bank in this state for the benefit of debtors in which all payments received from the debtors shall be deposited and in which all payments shall remain until disbursed by the licensee in accordance with the terms of the contract.

J. A licensee shall keep and use in his business books, accounts and records which will enable the superintendent to determine whether such licensee is complying with the provisions of this article and with the rules of the department. Each licensee shall preserve such books, accounts and records for at least three years after making the final entry on any transaction recorded in the books, accounts or records.

K. If a licensee desires to change his place of business or the name of the company under which the license is issued, he shall give written notice of the change within fifteen days to the superintendent and shall submit the license to the superintendent who shall enter an order permitting the change and who shall amend the license accordingly.

L. A licensee shall, within fifteen days after termination of a debt management company, a branch office or an agency, inform the superintendent of the name and address of such company, branch office or agency and shall surrender the license to the superintendent.

M. A licensee shall annually on or before August 15 file a report with the superintendent giving such relevant information as the superintendent may require concerning the business and operations of each place of business during the preceding year beginning July 1 and ending June 30. The superintendent may assess a penalty of five dollars for each day the licensee fails to file such report.

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Last modified: October 13, 2016