MN SF2141

Requires debt settlement services providers to conduct individualized financial analysis and determine that proposed debt settlement plans offer net tangible benefit to debtors before executing agreements.

Prohibits debt settlement services providers from holding debtor funds or establishing trust accounts; allows only electronic withdrawals for fees with written debtor permission and assistance with creditor payments.

Restricts fee collection to only after debts are settled and debtor makes at least one payment; limits fees on proportional debt basis to 25 percent of enrolled debt or a percentage of savings basis.

Requires fee disclosures to be itemized separately on front page of agreement and limited to settlement fees (removing origination and monthly fees); requires certification from creditor that payment constitutes settlement or part of payment plan leading to settlement.

Removes provisions allowing continuation of monthly fee collection after cancellation and eliminates monthly fee entitlement based on settlement offers or debtor rejection; effective August 1, 2012.