Are there any legal requirements to debt settlement?

In Nebraska, debt settlement is regulated by the Nebraska Debt Adjustment and Credit Repair Practices Act. This law sets forth the legal requirements for debt settlement in the state. Debt settlement companies in Nebraska must be licensed by the Nebraska Department of Banking and Finance. In order to obtain a license, a debt settlement company must meet certain qualifications and provide certain information to the Department. The law also outlines what a debt settlement company cannot do. It is illegal for a debt settlement company to require or accept payment for its services prior to: receiving written authorization from the consumer to initiate debt settlement negotiations; providing the consumer with a written disclosure detailing the terms of the services; and successfully negotiating and settling at least one debt with a creditor. Additionally, the law sets a timeline for a debt settlement company to complete the debt settlement process. The company must attempt to negotiate and settle all of the consumer’s debts within two years of the initiation of debt settlement negotiations. It is also illegal for a dispute settlement company to misrepresent the services it provides or to gather or retain personal information in an unlawful manner. Consumers should be sure to verify the legitimacy of a debt settlement company prior to entering into an agreement.

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Are there any legal requirements to debt settlement?

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