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

S_GA PASS-01 — Georgia provider market access and consumer fees

Baseline: October 22, 2026, Pacific. Actual access: October 23, 2026, approximately 05:48–06:01 UTC, corresponding to October 22, 2026, approximately 10:48–11:01 p.m. PDT.

Component result: Georgia has a conditional statutory pathway for compliant debt-adjustment services involving payment distribution. The materials examined do not establish an ordinary debt-adjuster license that authorizes a conventional debt-settlement business. Negotiation without custody can still meet the statutory definition, and a lawful positive-fee pathway for a purely noncustodial provider was not established.

The verified ordinary fee ceiling is 7.5% of the relevant monthly creditor-payment base, with a consequential disagreement over the denominator: Pries v. GreenPath excludes the provider’s fee from that base, while informal agency guidance uses language suggesting a deduction from the total payment. This report preserves that disagreement.

This is a component investigation. It does not complete Georgia, approve a particular provider, or imply state or A066 acceptance.

Source identifiers below use S_GA-P1-S001–S026; claim identifiers use S_GA-P1-C001–C036.

A. Substantive findings

1. What Georgia classifies as debt adjusting

The operative test concerns the contracted activity

O.C.G.A. §18-5-1(1) combines a business/holding-out element with a contract for compensation. It reaches a business offering debt adjustment, budget counseling, debt management, debt pooling, or similarly described debt-management services that contracts with a debtor for a fee to do either of the following:

• Adjust, compromise, or discharge an account, note, or other indebtedness.
• Receive the debtor’s money or other value and distribute it to creditors.

Those are alternative activity branches. Receiving or controlling debtor funds is not a prerequisite to the adjustment/compromise branch. A “negotiation,” “consulting,” “membership,” or “legal services” label does not resolve coverage.

Claims C001–C003; sources S001 §18, S002 §18-5-1. legiscan.com+1

Once the activity is covered, §18-5-2 expressly includes charges, fees, contributions, and combinations. Calling the consideration a contribution therefore does not itself avoid the ceiling.

The Attorney General’s Unofficial Opinion 1997-6 also distinguished general counseling from the complete statutory definition. Its discussion of the former broad prohibition is historical, however; it is not the source of current permission. C003, C009, C014–C015; S017, S002.

Consumer/business purpose and resident/remote nexus

The definition uses broad indebtedness language rather than an express personal, family, or household-purpose limitation. I did not establish a general business-debt exclusion. In particular, the mere fact that an individual incurred a debt for business purposes is not a verified exemption.

The fee restriction and annual requirements expressly refer to debtors residing in Georgia. “Resides” includes temporary as well as permanent residence. Those provisions do not condition application on the provider having a Georgia office. An out-of-state provider therefore cannot assume that remote delivery removes its dealings with a Georgia resident from the Act.

Two boundaries remain held:

1. Application of the residence language to a corporation or other entity debtor.
2. The complete obligations of a Georgia-based operator serving only nonresident debtors, particularly because §18-5-3.2 uses broader wording than the resident-specific fee and annual-filing provisions.

C004–C005; S002 §§18-5-1, -2, -3.1, -3.2. law.justia.com+3

2. Prohibited, conditionally permitted, and exempt models

The ordinary pathway is statutory compliance, not a debt-adjuster license

The operative chapter establishes substantive restrictions and annual filing duties. The Attorney General’s current operational page provides audit/insurance filing forms and an exemption certification. It does not provide a debt-adjuster license application or an approval process that converts an otherwise unlawful fee model into a lawful one.

Accordingly, the supported classification is:

The 2025 ConsumerEd guidance treats the stop-paying-creditors/send-money-for-eventual-settlement model as unlawful. That guidance supports a warning about that model; it does not justify rewriting the statute as a categorical prohibition on every principal reduction. Pries’s lump-sum discussion is illustrative judicial reasoning, not a provider approval.

C006–C008; S009, S013 pp. 4–7 and p. 6 n.2, S015, S002 §18-5-3.2. consumer.georgia.gov+3

Exemptions require the actual statutory facts

Attorney/practice-of-law exclusion. The operative phrase is debt adjusting “incurred in the practice of law in this state.” The current statutory attorney clause does not contain “incidentally.” That word appears in the separate own-creditor exclusion.

The mere presence of a lawyer, a law-firm contract, attorney ownership, or an attorney referral does not establish that the actual debt-adjustment work falls within the exclusion. Two recent bankruptcy opinions are particularly relevant:

• Schofield v. The Brian A. Moore Law Firm, LLC (In re Mai), September 30, 2025, examines the actual services rather than granting a categorical law-firm exemption.
• Wills v. Turnbull (In re Bush), March 31, 2026, follows that approach at the pleading stage.

These opinions do not establish ultimate liability for every defendant or a complete bright-line definition of legal practice. Bush reported that the Mai appeal remained undecided as of March 31, 2026; its status at this investigation’s baseline was not verified. C010, C036; S002 §18-5-3, S018 Part V, S019 pp. 10–13 and p. 4 n.3. law.justia.com+2

Nonprofit organizations. Section 18-5-3 contains no standalone nonprofit exclusion. An organization’s tax status or charitable description does not establish exemption from Georgia’s chapter. The treatment of bona fide nonprofits under the FTC’s jurisdiction is a separate federal issue. C009; S002 §18-5-3, S017, S023.

Own-creditor adjustment. The exclusion concerns persons or entities that incidentally adjust indebtedness owed to themselves. A paid intermediary negotiating debts owed to unrelated creditors does not qualify merely because it calls its activity incidental. C011; S002 §18-5-3.

Institutional exclusions. Section 18-5-3 enumerates:

• Fannie Mae and Freddie Mac.
• Banks, bank holding companies, trust companies, savings and loan associations, credit unions, credit card banks, and savings banks meeting the stated regulatory-supervision condition.
• Persons defined in §7-3-3 operating under Chapter 3 of Title 7, the Georgia Installment Loan Act.
• The statutory language also addresses the listed entities’ subsidiaries.

The current reproduced regulator list names the OCC, Federal Reserve, FDIC, NCUA, and Georgia Department of Banking and Finance. A generic relationship with a regulated institution, or possession of some other financial license, is not an established substitute for the enumerated conditions. Full qualification under §7-3-3 and the relevant institutional licensing regime remains a targeted follow-up if that exemption is invoked.

C012; S002 §18-5-3, S004 §9, S026 §18. law.justia.com+2

Separate unauthorized-practice boundary

The Georgia Supreme Court’s In re UPL Advisory Opinion 2003-1, 280 Ga. 121, addresses a nonlawyer company negotiating with a creditor’s lawyer for a debtor already sued. The court found unauthorized practice despite a limited power of attorney, disclaimers, and arrangements under which the creditor’s attorney prepared documents.

That is a controlling, fact-specific boundary. It should neither be ignored because the provider satisfies the Debt Adjustment Act nor expanded here into a holding that every prelitigation negotiation is unauthorized practice.

C013; S020, 280 Ga. at 122–123. law.justia.com

3. Georgia fee bases, limits, adjustments, and refunds

Verified ordinary ceiling

Section 18-5-2 prohibits direct or indirect acceptance of covered consideration exceeding 7.5% of the monthly amount paid by the debtor to the provider for distribution to creditors.

The provision does not establish independent percentage allowances based on:

• Original or enrolled debt.
• Debt forgiven.
• Savings.
• Number of creditors.
• Number of settlements.

Nor did the examined sources establish an additional setup allowance, minimum monthly charge, annual dollar allowance, or lifetime fee allowance that can be added to the ordinary ceiling.

C014–C015; S002 §18-5-2; S001 §18. law.justia.com+1

C017–C018, C021–C022; S002 §§18-5-2, -3.1(a)(1), -4(b)(2).

Material denominator conflict: net creditor payments versus total payment

In Pries v. GreenPath, the federal district court interpreted the statutory base as the amount distributed to creditors excluding the provider’s own fee. It rejected calculation on a total payment that includes that fee.

By contrast, the September 26, 2025 ConsumerEd article describes taking 7.5% “off the top.” If applied to a fee-inclusive payment, that produces a different result.

This pass therefore uses the Pries method for bounded calculations:

Ordinary fee ≤ 0.075 × creditor distribution, excluding the provider fee.

But the report does not claim a verified Georgia appellate decision has conclusively resolved the conflict statewide. Pries is a federal district-court ruling on a motion to dismiss; subsequent appellate history was not established.

C016, C036; S013 pp. 4–7; S015 answer discussing lawful adjustment. cases.justia.com+1

Indexing and dated material

No CPI mechanism, inflation-adjustment formula, or current adjustment notice was identified for the chapter’s 7.5% ceiling. Consequently:

• The percentage is not converted into an invented annual dollar schedule.
• No inflation-adjusted setup, monthly, or settlement allowance is supplied.
• The reasonable NSF amount remains held because the examined provision supplies no numerical amount.

The Attorney General’s HTML statute page expressly identifies its text as current through 2006. The accessible November 2024 exemption form also contains older terminology. Those materials cannot establish the current wording merely because they remain online.

The currentness work included the 2015 and 2020 enacted amendments, the 2025 statutory reproduction, and official 2025/2026 legislative summaries. The latter did not identify a Chapter 18-5 amendment in the portions searched. This is meaningful corroboration, but the inaccessible official consolidated-code route prevents an unqualified authenticated-code certification.

C025–C027; S003–S008, S011–S012, S024–S026.

4. When fees may be requested or received

Georgia rules

Three propositions must remain separate:

1. Section 18-5-2 restricts acceptance of consideration above the ceiling.
2. Section 18-5-3.2(a) requires distribution of debtor funds, less authorized fees, to appropriate creditors within 30 days of receipt.
3. Section 18-5-3.2(b) requires a separate trust account for debtor receipts and disbursements.

The 30-day provision does not authorize indefinite accumulation, and the ceiling does not itself authorize an advance fee.

The current Attorney General “Credit and Debt” guidance says no upfront fees. A historical October 11, 2013 ConsumerEd answer states that some upfront fees may be permitted within the combined monthly limit. Neither educational page establishes an exception to an independently applicable federal prohibition. The precise state-only point within a monthly service cycle at which a compliant ordinary fee may first be requested or deducted was not conclusively resolved by a controlling decision in this pass.

C019–C020; S002 §§18-5-2, -3.2; S014 debt-management discussion; S016 answer. law.justia.com+2

Independently applicable federal TSR baseline

The current text of 16 C.F.R. §310.4(a)(5) was read directly. Its debt-relief fee prohibition became effective October 27, 2010. The eCFR page checked here reported currency through October 21, 2026; that webpage currency date is not the debt-relief provision’s effective date.

Where the TSR applies, the seller or telemarketer may not request or receive the fee until:

1. At least one debt has actually been renegotiated, settled, reduced, or otherwise altered under a valid agreement executed by the customer.
2. The customer has made at least one payment pursuant to that agreement.
3. For debts resolved individually, the fee satisfies one of the specified allocation methods.

The allocation alternatives are:

• The resolved debt’s enrollment balance divided by the total enrolled balance, applied proportionally to the total fee; or
• A constant percentage of savings, using the enrollment balance and the amount actually paid to satisfy the debt.

These federal alternatives do not authorize those fee bases in Georgia.

C029–C030, C034; S021 §310.4(a)(5)(i)(A)–(C); S022, 75 Fed. Reg. 48458, 48480–48481. ecfr.gov+2

DMP nuance. The 2010 rule explanation requires a customer-executed DMP binding on applicable creditors and evidence of the customer’s first payment to the counseling agency for creditor distribution. It also explains that later periodic servicing fees are not prohibited merely because they recur. Georgia’s ceiling and conditions still apply.

Installment nuance. A genuine creditor-approved installment settlement can satisfy the first-payment condition with its first agreed installment. A provider cannot divide a creditor-required lump sum into invented installments and charge after a token payment.

C031–C032; S022, 75 Fed. Reg. 48489, §III.C.5(a), nn.431–432. govinfo.gov

Coverage boundaries. The TSR debt-relief definition concerns unsecured creditors or debt collectors and includes balance, interest, and fee concessions. Coverage requires the relevant telemarketing and jurisdictional facts. Inbound calls responding to debt-relief advertising and direct-mail solicitations are expressly carved out of otherwise available inbound-call exemptions. There is no general attorney exemption. Bona fide nonprofit jurisdiction and the rule’s face-to-face/business-call provisions require separate factual analysis; none supplies a Georgia exemption. C028; S021 §§310.2(o), (ii), 310.6(b)(3)–(7); S023 coverage discussion. ecfr.gov+2

Dedicated accounts and cancellation. Section 310.4(a)(5)(ii) permits a qualifying account arrangement only with its stated safeguards: insured institution, customer ownership and interest, independent administration, no compensated referrals, and withdrawal without penalty. Remaining account funds, less fees earned under the specified federal conditions, must be returned within seven business days of the request.

That is not a general seven-day Georgia cancellation rule, nor does it establish Georgia permission for the account structure. It also does not automatically claw back every previously earned fee merely because the customer later cancels.

C033–C034; S021 §310.4(a)(5)(ii)(A)–(E); S022, 75 Fed. Reg. 48490–48491. ecfr.gov

5. Public market-access procedure actually verified

The responsible office for these filings is the Georgia Attorney General’s Consumer Protection Division. Sections 18-5-3.1 and 18-5-5 supply the relevant filing/repository and rulemaking framework.

The following current public materials were opened and read:

• “Debt Adjustment Companies – Required Filings.”
• “Certification of Requisite Filing under the Debt Adjustment Act,” November 2024 form.
• “Certification of Requisite Filing Exemption under the Debt Adjustment Act,” November 2024 form.

The ordinary annual submission uses the cover sheet with an independent CPA audit and insurance documentation. The form requests company/contact details, the audit period and issuance date, insurance confirmations, signature, and notarization. The webpage provides return instructions.

The statutory prerequisites include:

• Independent annual CPA audit of accounts holding debtor funds and making creditor payments.
• Continuous insurance for employee dishonesty, depositor forgery, and computer fraud.
• Coverage of at least the greater of $100,000 or 10% of the immediately preceding six-month monthly average of aggregate deposits from all debtors.
• Deductible no greater than 10% of policy face coverage.
• Insurer rating of at least A− or equivalent.
• 30 days’ advance written termination notice to the Attorney General.
• Annual filing of the audit and insurance policy.

These are access-related prerequisites, not consumer service-fee allowances.

C023–C024; S002 §18-5-3.1; S009–S010. law.justia.com+2

The statute expressly makes the Attorney General a repository and provides that receipt alone does not impose oversight responsibility. That wording does not eliminate the chapter’s enforcement powers. More importantly, receipt of a filing is not an affirmative license or finding of compliance.

No public debt-adjuster license lookup, initial license application, fixed annual filing deadline, filing fee, or verified first-year audit accommodation was established in the examined materials. No named provider’s actual filing, exemption, or authorization status was verified.

The exemption form must also be read cautiously:

• It uses “incidental” in its lawyer checkbox, unlike the current statutory attorney clause.
• It retains “Georgia Industrial Loan Act.”
• It references the former Office of Thrift Supervision.
• The annual form’s awkward “greater of over $100,000” wording does not replace the statutory minimum.
• Absence of a deductible checkbox does not remove the statutory deductible restriction.

C024–C025, C035; S002 §§18-5-3, -3.1(c); S010–S011. law.justia.com+2

6–7. Examples and component coverage

The requested worked examples appear in Section D, followed by the complete coverage/gap table. They are conditional calculations and classification tests, not representations that a provider has been authorized.

B. Source register

Access convention: Every “read” entry below was checked during the actual access window stated above. “Read” means the relevant operative passage was retrieved and examined, not merely a search result. A reproduced statute, enacted bill, or judicial opinion remains primary legal material, but a private host is identified separately from an official issuer. Failed routes are not substantive evidence.

B1. Documents and operational sources

B2. Section URLs belonging to the single chapter document S002

These are section-level routes for S_GA-P1-S002, not additional document IDs.

B3. Failed routes material to unresolved issues

No paid access, application, contact, or access-control workaround was used to resolve these failures.

C. Claim table

Confidence convention: “High—text” means the cited provision or passage was actually read and directly supports the assertion. It does not remove the overall current-consolidation limitation. “Qualified” identifies an interpretation, bounded negative search, guidance conflict, or unresolved factual application. All source references below incorporate the version/status limitations in Section B.

D. Worked examples and coverage/gap table

D1. Plain-text worked examples

Shared assumptions for Examples 1–5: A nonexempt Georgia-resident service otherwise satisfies the applicable access requirements; creditor payments occur in the same month as the relevant receipts and within30days; any applicable TSR performance conditions have been met before requesting/receiving a fee. No unrelated fee allowance, carryforward, or exemption is assumed. Calculations use the Pries interpretation and do not resolve the guidance conflict.

Example 1 — $400 goes to creditors

Inputs: creditor distribution D = $400.00; ordinary rate = 0.075. Base: money distributed to creditors, excluding the provider fee. Operator: multiplication. Intermediate: 400.00 × 0.075 = 30.00. Result: ordinary fee ceiling = $30.00 for that month. Combined customer outlay if the full fee is charged: 400.00 + 30.00 = $430.00. Units/rounding: dollars; exact cents, no rounding needed.

A $400 creditor payment is different from a $400 total customer budget. C014, C016, C019, C029.

Example 2 — Customer has only $400 total

Inputs: total payment T = $400.00; fee F is included in that total. Base: creditor distribution = 400.00 − F. Operator: solve F ≤ 0.075 × (400.00 − F). Intermediate: 1.075F ≤ 30.00; F ≤ 27.906976… dollars. Result using downward cent rounding: $27.90 fee; $372.10 to creditors. Check: 372.10 × 0.075 = $27.9075, so $27.90 does not exceed the exact ceiling.

The downward rounding is a conservative calculation choice; no statutory rounding convention was verified.

For comparison, taking 7.5% of the $400 total produces a $30 fee and $370 distribution. The Pries ceiling on $370 is $27.75. That method therefore exceeds the court’s interpreted ceiling by $2.25. This is why the denominator disagreement matters. C016.

Example 3 — Lower debt, completed lump-sum settlement

Inputs: debt = $500; accepted settlement = $200; provider distributes the full $200 this month. Base: $200 distribution, not the $500 original debt or $300 reduction. Operator/intermediate: 200 × 0.075 = 15. Result: ordinary fee ceiling = $15.

A proposed $20 flat per-debt fee exceeds that ceiling by $5. A fee of20% of enrolled debt would be 500 × 0.20 = $100 and exceeds it by $85.

Legal conditions: this is a prompt, otherwise compliant distribution example, with an accepted agreement and actual payment where TSR applies. It is not permission to hold settlement funds for months or to undertake prohibited legal representation. C008, C013–C016, C029.

Example 4 — Fees already collected this month

Inputs: total creditor distributions this month = $600; ordinary fees already accepted = $20; proposed additional ordinary fee = $30. Base/operator: 600 × 0.075 = $45 aggregate ordinary ceiling. Intermediate: 45 − 20 = $25 remaining capacity. Result: proposed total fees = 20 + 30 = $50, exceeding the ceiling by $5.

Calling the second fee “setup,” “settlement,” or “membership” does not create a second allowance. This example assumes the earlier $20 was otherwise lawful; it does not establish that refunding $5 alone cures every statutory consequence. C014–C016, C021.

Example 5 — Partial settlement passes federal allocation math but fails Georgia’s ceiling

Inputs:

• Total enrolled debt = $10,000.
• First debt = $4,000.
• Other unresolved debt = $6,000.
• First debt settled under a genuine creditor agreement for ten $200 installments.
• Hypothetical total program fee = $2,000.

Federal allocation calculation: 4,000 ÷ 10,000 = 0.40. 2,000 × 0.40 = $800 allocated to the first debt.

That arithmetic does not establish that the $2,000 contract fee or $800 charge is lawful in Georgia.

Assume the customer has executed the agreement and the first $200 actually reaches the creditor through the provider this month. Georgia calculation: 200 × 0.075 = $15 ordinary fee ceiling this month. Full-fee customer outlay would be $200 + $15 = $215.

The remaining nine installments do not enlarge this month’s base. If $200 instead means the total fee-inclusive deposit, the downward-rounded Pries fee is $13.95, not $15.

Before the first agreed payment, the federal fee trigger is unmet. If the creditor required a single $2,000 payment, an unauthorized $200 partial payment would not manufacture an installment trigger. C014, C016, C029–C032, C034.

Example 6 — Noncustodial negotiation: classification hold

Inputs: debtor pays creditor $2,000 directly; negotiator receives no money for creditor distribution; negotiator requests a $400 fee. Coverage test: a compensated contract to compromise the debt can satisfy §18-5-1(1)(A). Ordinary statutory base on these stated facts: $0 paid to this provider for distribution. Arithmetic: 0 × 0.075 = $0.

Result: positive-fee pathway held. The service does not become exempt because it avoids custody. This example does not decide whether a particular independent-account arrangement changes the relevant legal receipt/distribution facts; that requires its contracts, control rights, and actual payment flow. C001–C002, C007.

Example 7 — NSF and audit-copy boundaries

NSF case: An attempted $100 debit fails. No creditor distribution occurs.

Ordinary-fee calculation on a zero distribution: 0 × 0.075 = $0. Separate NSF amount: held. The statute permits a reasonable, separate transaction charge, but this research did not verify a numerical amount or a rule making a proposed $25 or $35 charge automatically reasonable.

Audit-copy case: Assume a written request for the audit summary and documented reproduction cost of10pages × $0.10/page.

Intermediate/result: 10 × 0.10 = $1.00 reproduction cost ceiling on those facts. The $0.10 cost is an example input, not a statutory rate. This does not create a $1 monthly service allowance. C017–C018.

Example 8 — Federal dedicated-account cancellation

Inputs: qualifying TSR-covered dedicated account contains $1,000 principal and $2 accrued interest; no provider fee has been earned under the federal conditions. Base/operator: 1,000 + 2 − 0 = $1,002. Result: customer may withdraw without penalty and must receive $1,002 within seven business days of the request.

A $25 exit penalty is incompatible with the stated federal account condition. This example does not approve the account under Georgia law and does not create a general state cancellation period. C033–C034.

Example 9 — Statutory recovery is not merely the overcharge

Inputs: an established §18-5-2 violation; total covered fees paid = $240; no previous refund or offset assumed. Statutory measure: 240 + 5,000 = $5,240.

This illustrates §18-5-4(b)(2)’s stated measure. It does not calculate additional remedies, litigation expenses, disputed offsets, or the effect of earlier refunds. C021.

D2. Full component coverage and remaining investigations

E. Researcher self-check

Actually read: The operative chapter sections in the 2025 reproduction; relevant 2015 and2020 enacted passages; the official historical statute page; current filing instructions and both one-page forms; official rules indexes; relevant portions of official legislative summaries; the judicial passages identified above; current TSR fee, account, definition, and exemption provisions; and the material2010 adoption explanation.

Not treated as read authority: Search snippets, provider marketing, association fee charts, the unreadable AG “2022” PDF, the inaccessible official consolidated-code route, and inaccessible later-history dockets. No legal conclusion depends on a title-only or snippet-only result.

Authority checks: Statutory text, judicial holdings, informal guidance, operational forms, and historical material are separately identified. The Pries denominator conflict is retained. The recent attorney cases are not presented as final merits determinations or statewide appellate holdings. No relevant future-effective, proposed, stayed, vacated, or withdrawn change was established; unresolved subsequent history remains expressly held.

Execution checks: Parallel research subtasks contributed, and the sources relied on in this answer were reopened or examined in the main research session. No separate chatgpt.com conversations were opened, and no verified model-selector change is claimed. No Deep Research session, application, purchase, contact, account change, publication, or private borrower data was used. This answer makes no claim of local file creation or publication readiness.

Disposition: PASS-01 supplies substantive Georgia market-access and consumer-fee findings, with identified evidence holds. The remaining Georgia dossier categories and A066 acceptance remain open.

END S_GA PASS-01