Which place’s debt rules apply—and who can help?

S_DE — Delaware provider market access and consumer fees

PASS-01 | SettleADebt.com | Research access: October 24, 2026 | Baseline: October 22, 2026

A. Substantive findings

Executive determination

Delaware has an express statutory licensing framework for debt-management services under 6 Del. C. Chapter 24A, the Delaware Uniform Debt-Management Services Act. It covers more than conventional debt-management plans: the statutory definition expressly reaches intermediaries seeking concessions from unsecured creditors, which can include principal-reduction debt settlement.

The Delaware Department of Justice identifies the Attorney General as the licensing and enforcement authority and reports that the statute took effect January 17, 2007. Both for-profit and nonprofit providers can fall within the licensing requirement, including out-of-state providers serving known Delaware residents remotely. Delaware Code+2

Initial market-access classification: CONDITIONALLY PERMITTED, NOT AUTOMATICALLY AUTHORIZED.

This means a debt-settlement business should not classify Delaware as an unrestricted operating state. A covered provider needs the appropriate Delaware license and must comply with the applicable statutory, regulatory, contractual and fee restrictions. A business's authorization cannot be inferred from another provider's license or from the availability of an application.

The key distinctions for this investigation are:

• Debt settlement versus DMP: Both can be covered, although the rules applicable to their fees and performance may differ.
• Custodial versus noncustodial: Handling consumer funds is important, but the absence of custody does not by itself remove the licensing requirement.
• Nonprofit versus for-profit: Nonprofit status alone is not an exemption.
• Attorney versus commercial provider: The statutory legal-services exclusion requires qualifying legal services within an attorney-client relationship, not merely an attorney's involvement.
• State versus federal timing: Delaware's fee limits do not override the FTC Telemarketing Sales Rule's independently applicable advance-fee prohibition.

These are legal classification findings, not a determination that SettleADebt.com or any particular provider has obtained authorization.

1. Statutory classification and territorial reach

S_DE-P1-C001 — Definition. Under § 2402A(7), a concession is a more favorable repayment term than the original creditor agreement. Under § 2402A(9), debt-management services involve acting as an intermediary between an individual and unsecured creditors to obtain concessions. Section 2402A(17) separately defines a settlement fee by reference to a creditor accepting less than principal in full satisfaction. Delaware Code+1

Consequently:

S_DE-P1-C002 — Residency. Sections 2403A(a)–(b) and 2404A(a) establish a knowledge-based Delaware residency test at the time the provider agrees to furnish services. Remote operations do not independently exempt a provider. Delaware Code+1

S_DE-P1-C003 — Exemptions. Section 2403A includes a no-compensation exemption and specified exclusions for judicial officers, court-directed persons, assignees for creditors' benefit, banks, qualifying regulated bank affiliates and certain incidental bill-paying providers. The no-compensation test includes compensation from creditors, not just fees collected directly from consumers. Attorney, accountant and financial-planner exclusions must independently satisfy the definition's requirements. Delaware Code+1

2. Permission and licensing

S_DE-P1-C004 — License requirement. Section 2404A prohibits a covered provider from serving a person it reasonably should know is a Delaware resident unless the provider holds a Chapter 24A license. Employees and agents of an already licensed provider are addressed separately in § 2404A(b). The Attorney General must publicize a list of licensees under § 2404A(c). Delaware Code

S_DE-P1-C005 — Application. Sections 2405A–2406A require a prescribed application, a $2,000 nonrefundable government application fee, required bond documentation, insurance evidence, ownership and operating information, accreditation, counselor certification information and other disclosures. The statute specifies $250,000 in qualifying insurance. These are provider-side licensing costs, not consumer debt-settlement fees. Delaware Code+1

The Delaware Department of Justice provides an official licensing resource page, with initial application, renewal, surety bond, approved accreditation and counselor certification resources.

The published licensee roster dated April 15, 2025 was located, but that dated roster is not proof of a particular provider's current October 2026 status. State of Delaware+1

3. Consumer fee structures

S_DE-P1-C006 — Mandatory agreement prerequisite. Section 2423A(a)–(b) prohibits charges outside the statutory permissions and prohibits imposing or receiving debt-management fees before a compliant agreement is signed. Section 2423A(c) separately restricts education and counseling charges when the consumer enters an agreement. Delaware Code

S_DE-P1-C007 — Concession-only DMP. For plans involving reductions in finance charges, late fees, default fees or delinquency fees, § 2423A(d)(1) specifies statutory starting amounts of $50 for setup-related services and a monthly maximum of the lesser of $10 per remaining creditor or $50. These dollar amounts are expressly subject to § 2432A(f) adjustments. Delaware Code

S_DE-P1-C008 — Principal-reduction settlement. Section 2423A(d)(2) authorizes categories of setup, monthly and settlement fees, subject to its other requirements. It specifies an 18% aggregate ceiling on total principal debt, and § 2423A(f) imposes a debt-specific limitation with crediting of earlier setup and monthly charges. The statute forbids charging under both the concession-only and principal-reduction structures. Delaware Code

The 18% amount is a statutory ceiling, not a guaranteed permissible contract rate, not a percentage of savings, and not an authorization to collect in advance.

S_DE-P1-C009 — No-agreement counseling. Section 2423A(d)(4) allows up to $100 for qualifying education or counseling when the consumer does not enter an agreement, unless the Attorney General approves a higher fee. Under subsection (e), that fee must be refunded if the consumer enters an agreement before 90 days have elapsed following completion or termination of counseling. The exception in § 2428A(d) still requires investigation. Delaware Code

S_DE-P1-C010 — Inflation adjustments. Section 2432A(f) permits Attorney General adjustments to specified statutory dollar amounts, with a July 1 effective mechanism and public notice under subsection (g). The exact adjusted consumer dollar limits effective October 24, 2026 are held, because a controlling adjustment notice has not been authenticated. No CPI-based figure is substituted. Delaware Code

4. Fee timing: Delaware versus federal law

S_DE-P1-C011 — Federal TSR. The directly opened eCFR text, displayed as current through October 22, 2026, establishes that for covered telemarketed debt-relief services, a fee cannot be requested or received until the applicable debt has been renegotiated, settled or otherwise altered under a valid agreement and the consumer has made at least one payment under that agreement.

For individually settled debts, § 310.4(a)(5)(i)(C) requires either proportional allocation based on enrolled balances or a consistent percentage-of-savings method. It does not permit arbitrary front-loading of a portfolio fee. eCFR

A compliant Delaware agreement therefore does not by itself establish that a telemarketed provider may immediately charge a setup or monthly fee. The independently applicable federal rule must also be satisfied. Federal coverage and exemptions must be evaluated for the actual sales and service model.

5. Refunds, cancellation and failure cases

S_DE-P1-C012 — Cancellation. Section 2420A provides an ordinary three-business-day cancellation period, extended to 30 days for specified noncompliant agreements or notices. A narrow personal-financial-emergency waiver exists, but requires a signed, dated, individualized statement expressly waiving cancellation; a standard-form waiver is void. Delaware Code

S_DE-P1-C013 — Termination refunds. Section 2426A distinguishes providers holding consumer funds from those not holding them. The statute specifies return of trust funds and 65% refund calculations for certain uncredited setup fees or fees associated with unsettled principal, respectively. Section 2422A(h) separately addresses undistributed funds after termination or plan failure. These rules cannot be replaced with a universal full-refund or no-refund policy. Delaware Code+1

S_DE-P1-C014 — Unauthorized fees or unlicensed agreements. Section 2425A makes specified agreements voidable where unauthorized fees are charged or required licensing was absent when the consumer assented. Delaware Code

B. Primary-source register

All access checks below were conducted October 24, 2026. A source's publication or legal effective date is distinct from its access date.

Source distinction: S001 and S006 support the strongest substantive legal findings. S005 is an important unresolved source, particularly for complete regulatory implementation and any current dollar adjustments. No model-act revision has been substituted for Delaware's enacted wording.

C. Claim-to-evidence register

The following is the consolidated claim table. Each claim ID remains tied to the assertion in Part A; additional limitations are included here.

Critical distinction: 18% is not an earned-fee schedule

A 15%, 18%, or other contracted fee cannot simply be collected against the entire enrolled portfolio when the first debt settles.

For a covered telemarketed program, the federal allocation rule must be applied consistently across debts, using the same enrollment balances and contracted total fee, or a consistent savings percentage. Delaware's separate per-debt credits and refund rules must also be satisfied.

The federal rule does not establish that every fee which is numerically below Delaware's ceiling has become earned or payable.

D. Bounded worked examples

These are calculation and classification tests, not approved consumer pricing schedules. Dollar calculations use exact arithmetic and are displayed to two decimal places.

Example DE-E01 — Lower-debt DMP

Assume three participating creditors remain in a concession-only plan and no principal reduction is contemplated.

Statutory starting monthly ceiling:

min⁡(3×$10, $50)=$30\min(3\times $10,\ $50)=$30min(3×$10, $50)=$30The nominal setup ceiling is $50, subject to adjustment.

Result: $30 is the statutory starting monthly ceiling for three creditors, not a verified October 2026 adjusted ceiling and not necessarily a presently collectible fee. The agreement, licensing, performance and applicable federal timing conditions must still be satisfied. [C006, C007, C010, C011]

Example DE-E02 — Principal-reduction aggregate cap

Assume a covered program enrolls two unsecured debts:

At the statutory 18% ceiling:

$10,000×0.18=$1,800$10,000\times 0.18=$1,800$10,000×0.18=$1,800This is the maximum aggregate amount under that statutory percentage ceiling, before accounting for any stricter applicable restrictions.

Assume, only to test federal proportional allocation, that the lawful contracted total fee is $1,500, or 15% of enrolled principal. No setup or monthly fees have previously been earned or collected.

If Debt A settles for $2,000, and the customer makes a payment under the valid settlement agreement, the federal debt-specific performance prerequisites can be satisfied for Debt A. Its allocated contract amount is $600.

Result: $600 is the arithmetic allocation for Debt A, not an unconditional finding that $600 is lawful under every Delaware provision or contract. Debt B's $900 remains unearned under the assumed TSR method until its own applicable conditions occur. [C008, C011]

Example DE-E03 — Settlement without customer payment

Use the same $4,000 Debt A and $600 allocated fee.

The creditor agrees to accept $2,000, but the consumer has made no payment pursuant to the settlement agreement.

Federal TSR fee currently collectible:

$0$0$0Result: The creditor's agreement alone is insufficient to trigger the federal fee. [C011]

Example DE-E04 — Prior-fee consistency

Assume the same $10,000 portfolio and $1,500 total contracted fee, with proportional allocation.

Suppose the provider claims $300 in earlier setup or monthly fees.

Under the assumed covered TSR program, those earlier fees cannot be presumed earned merely because a compliant agreement was signed or one payment was made on a different debt. Their collection history, debt attribution and performance triggers must be demonstrated.

Result: The proposed $300 deduction is held. It is not inserted into a Delaware per-debt calculation until its legal timing, contractual allocation and prior crediting are established. [C006, C008, C011]

Example DE-E05 — Cancellation and noncustodial termination

Assume a compliant agreement, no valid emergency waiver and a cancellation notice within the ordinary three-business-day window. The consumer has paid $200 to the provider.

Under the ordinary timely cancellation rule, the statutory notice contemplates refund of all $200.

For a later termination, assume instead that the provider holds no consumer funds, total qualifying fees associated with the relevant principal are $1,000, and 40% of the principal remains unsettled.

The statutory 65% formula would produce:

$1,000×0.40×0.65=$260$1,000\times 0.40\times 0.65=$260$1,000×0.40×0.65=$260Result: $260 is an illustrative application of the noncustodial termination formula, provided the $1,000 fee base is actually lawful and properly attributable. It is not a determination that the assumed $1,000 was earned. The timely-cancellation example and later-termination example are distinct legal situations. [C012, C013]

Example DE-E06 — No-agreement counseling

Assume a provider furnishes qualifying counseling and receives $80, with no debt-management agreement entered at that time.

If the individual later enters an agreement 45 days after counseling ended:

Refund=$80\text{Refund}=$80Refund=$80The $80 is within the statute's unadjusted $100 starting ceiling, and the 45-day interval falls inside the 90-day refund condition.

Result: The full $80 is subject to refund under § 2423A(e), assuming the charge was otherwise permissible and no relevant exception alters the analysis. [C009, C010]

E. Component coverage and gap register

Exact next investigations

The highest-priority unresolved Delaware evidence is the complete current text of 6 Del. Admin. C. 102, including its fee provisions, adoption history and any inflation-adjustment notices under § 2432A(f)–(g). The official regulatory link was located but did not yield readable substantive text in this pass. The alternate initial URL https://regulations.delaware.gov/AdminCode/title6/100/102.shtml also failed.

Next, the licensing roster must be checked against the intended legal provider entity and transaction date; the dated April 2025 list cannot establish October 2026 authority. The full statutory language of § 2428A(d), current application and renewal instructions, and any Attorney General fee authorizations need a dedicated verification.

Finally, any proposed pricing model must be tested debt by debt against the exact agreement, prior fees, principal balances, settlement dates, creditor agreements, actual consumer payments and the same consistent TSR allocation method.

F. Researcher self-check

This investigation used regular Chat public web retrieval only. It did not use Deep Research, Chrome control, new browser tabs, account permissions, applications, purchases, private borrower data, external contacts or publication actions.

The official Delaware Chapter 24A codification, Delaware DOJ licensing guidance and relevant federal eCFR provisions were opened and substantively read. The historical provider roster was opened, but not treated as a live licensing verification. The official Delaware regulatory link returned no extractable operative text. No complete current regulatory adoption-order chain, definitive 2026 inflation notice, provider-specific license record or controlling-cases corpus was authenticated.

This is researcher self-check, not independent legal review. No local files were written, no provider was authorized by this research, and no claim of full Delaware dossier completion or publication readiness is made.

PASS-01 disposition: Delaware's covered debt-management and settlement services have a conditional licensing pathway. Core statutory fee ceilings and federal timing restrictions are identified, but current adjusted dollar limits, complete regulations, individual-provider authorization and operational fee implementation remain open.

END S_DE PASS-01