Section 425.010

Title XXVII DEBTOR-CREDITOR RELATIONS

Chapter 425

Effective - 28 Aug 2007, 2 histories, see footnote   (history) 

  425.010.  Definitions. — As used in this chapter, the following terms mean:

  (1) "Debt adjuster", a person who acts or offers to act for a consideration as an intermediary between a debtor and his creditors for the purpose of settling, compounding, or in any wise altering the terms of payment of any debts of the debtor; and to that end the person receives money or other property from the debtor, or on behalf of the debtor, for payment to the debtor's credit by the person, or distribution among, the creditors by the person. This definition shall only apply to a person who collects funds from a debtor and delivers such funds to the debtor's creditors;

  (2) "Debt management plan" or "DMP", a written agreement or contract between a debt adjuster and a debtor whereby the debt adjuster agrees to provide its services as such to the debtor in return for payment by the debtor of no more than reasonable consideration;

  (3) "Debtor", an individual or individuals jointly and severally or jointly or severally indebted;

  (4) "Reasonable consideration", a fee or contribution to cover the cost of administering a debt management plan, not to exceed:

  (a) Fifty dollars for an initial or set-up fee or charge for establishing a DMP; and

  (b) The greater of thirty-five dollars per month or eight percent of the amount distributed monthly to creditors under such DMP.

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(L. 1963 p. 646 § 1, A.L. 2007 H.B. 329)