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

S_MN PASS-05 — Minnesota settlement-fee performance and partial-plan savings

Research/access date: October 27, 2026, America/Los_Angeles. Component: Ordinary consumer debt settlement—fee performance, partial-plan savings, necessary cancellation consequences, and the federal Telemarketing Sales Rule (TSR). Disposition: The operative textual requirements and federal comparison are established within the version limits below. Minnesota’s agreement-wide versus debt-by-debt performance question, interim savings computation, and the reach of the unusual cancellation exception remain unresolved.

This pass does not approve a provider, contract, deduction, refund determination, or operating model. P01–P04 remain preserved; their reviewed findings are not relabeled as new research.

Throughout this report, S001 means S_MN-P05-S001, and C001 means S_MN-P05-C001. Full identifiers appear in the registers.

1. Principal findings

A correct fee ceiling is not an earned fee. Minnesota separates the permitted calculation method from the performance prerequisite and individual-debt allocation restriction. The federal rule adds different predicates when it applies. Satisfying one layer does not establish the others. [C006–C010, C022–C025] MN Revisor+1

Minnesota does not expressly reproduce the federal savings-allocation alternative. Its collection provision refers to the individual settled debt’s share of aggregate debt. The TSR separately permits either proportional-debt allocation or an unchanged percentage of savings across individual debts. A federal savings allocation therefore requires a separate Minnesota test. [C010, C024–C025] MN Revisor+1

An unfinished debt is not a zero-dollar settlement. Subtracting payments made so far from the entire enrolled balance can misclassify unresolved liabilities as savings. Minnesota also excludes concessions not actually negotiated by the provider. [C008, C033] MN Revisor

The clearest conditional collection model is a completed plan: all relevant outcomes documented, all promised services completed, final savings known, one consistent allocation method, and valid payment authorization. Model M02 demonstrates that narrow situation without treating earlier creditor payments as earlier Minnesota earning events.

A. Controlling text, versions, and interpretive limits

A1. Currentness and material effective dates

The retrieved Minnesota section pages remain labeled 2025 Minnesota Statutes. The targeted 2026 regular-session statutes-changed table lists the previously reviewed accreditation repeal and application amendment, but no change to §§332B.06, .07, .09, or .12 in the relevant contiguous entries. This supports the specified textual analysis; it is not an exhaustive later-session or fully consolidated October 2026 certification. [S007; C001] MN Revisor

The material fee-performance enactment is Laws 2013, chapter 91, §7. It replaced the former advance-fee structure with the present performance and allocation language. Section 8 makes §§5–7 applicable to agreements entered into on or after August 1, 2013. Every fictional agreement below is dated in 2026. Historical origination/monthly-fee tables are not used. [S006; C002] revisor.mn.gov

P02’s findings concerning 2026 chapter 124, article 1, §§59, 60, and 63, including its August 1, 2026 effective-date construction, remain reviewed context. This pass does not rederive that construction or turn accreditation changes into fee amendments.

The retrieved eCFR pages identify Title 16 as current through October 23, 2026. The displayed October 19 title-amendment date is not represented as an amendment date for the debt-relief provisions themselves. The debt-relief advance-fee rule originally became effective October 27, 2010. [S010, S013; C019] eCFR+1

A2. Minnesota’s performance question

Section 332B.09(3) places a performance condition before payment imposition or collection. It covers both the services in the agreement and additional promised services. Its following sentence limits multi-debt collections by the individual settled debt’s share of aggregate debt. [S001; C009–C010] MN Revisor

Two constructions requiring separate treatment

These are researcher constructions, not holdings. They are not presented as equally strong or as alternative compliance elections.

An allocation clause can restrict how much may be collected without independently deciding when. Consequently, the mere existence of a debt-by-debt calculation does not prove that Minnesota authorizes interim collection.

Conversely, “full performance” should not be mechanically rewritten as “the consumer has made the last installment.” What the provider promised matters. Negotiation, payment monitoring, follow-up negotiations, and a final counseling session may have different completion dates. The identified authority does not establish one universal last-payment rule for every contract.

Practical research disposition: An interim fee remains held unless the actual services, additional promises, completed work, and controlling construction support it. Neither a contract label nor a first creditor payment resolves that issue. [C032]

A3. Partial-plan savings

The statutory savings calculation uses the agreement-execution aggregate and amounts actually paid to settle all included debts, with provider attribution required. [S001, §332B.09(2)(2); C008] MN Revisor

The unresolved question is whether, and under what authority, a provider may turn a completed subset into an interim collectible savings fee before the plan-wide figure is final.

A signed modification is not automatically a lawful way to rewrite historical balances or avoid earned-fee restrictions. Section 332B.06(7) requires signed written modifications and bars a modification fee, but does not itself answer this savings-allocation question. [S004; C018] MN Revisor

A4. Cancellation: preserve the actual exception

The structure of §332B.07(1)(d) must remain visible. It begins “Notwithstanding paragraph (c)” and speaks of entitlement to the agreement’s full fees where the provider can show the numbered circumstances below.

Structure-preserving paraphrase—not replacement statutory wording:

1. The provider obtained an offer conforming to the services agreement;
2. the debtor rejected that offer; OR
3. during the contemplated period, the debtor settled with the same creditor or creditors for an amount no greater than the provider’s offer.

The statute prints OR before item (3). This report does not insert an AND, require all three items, or announce that any isolated item invariably establishes collectible full fees. [S003; C015] MN Revisor

Important limits follow from the provision’s placement:

• Its express override names paragraph (c), concerning cessation of monthly collection.
• It does not expressly state that it overrides §332B.09’s performance, amount, or allocation requirements.
• Its interaction with the 2013 restructuring remains interpretively important.
• A state-law fee claim under this provision does not itself satisfy the federal customer-agreement and payment predicates.

The survival of monthly-fee wording in cancellation or disclosure provisions is not treated as a new affirmative authorization for the repealed advance-fee structure.

Different return obligations must not be merged

These are distinct triggers, recipients, and deadlines—not interchangeable grace periods. [C011, C014–C017, C027] MN Revisor+2

B. Necessary federal comparison

B1. Coverage assumptions

The models assume an ordinary, nonexempt, for-profit provider offering relief on unsecured personal debts through a covered telephone-sales campaign involving more than one interstate call. The statutory person, seller, telemarketer, customer, and debt-relief definitions must fit the actual actors and service. [S009; C019] eCFR+1

The exemption analysis is not reducible to “outbound calls only”:

No nonprofit, attorney, bank, institutional, or other jurisdictional exclusion is assumed from a label. Those entity questions remain outside these fictional ordinary-provider assumptions. [S011; C020–C021] eCFR

B2. Federal predicates are cumulative

For a covered seller or telemarketer, §310.4(a)(5)(i) requires:

A: A qualifying alteration of a debt under a valid agreement executed by the customer. B: A customer payment under that creditor/debt-collector agreement. C: When debts are handled individually, either the proportional-debt allocation or the consistent savings-percentage allocation. [S010; C022–C025] eCFR

The Commission’s final-rule explanation adds useful precision: the consumer must execute the specific resolution, rather than relying on blanket advance approval or the provider’s power of attorney. A first installment can satisfy the federal payment predicate; federal collection need not always await resolution of every other debt. That is federal interpretation—not a construction of Minnesota’s full-performance language. [S013, III.C.5(a)–(c), 75 FR 48489–48490; C030–C031] Federal Register

Two federal allocation methods

For debt iii, using enrollment balances:

Proportional-debt method: fee_i = total contractual fee × enrolled debt_i / total enrolled debt

Consistent-savings method: fee_i = unchanged percentage × qualifying savings_i

The first creditor payment is not itself the savings base. For an installment settlement, subtracting only the first installment from the original debt would exaggerate savings; the Commission’s explanation uses the amount required to satisfy the resolution. [S013, III.C.5(b); S014] Federal Register+1

Do not alternate methods opportunistically. Matching total dollars across a plan does not establish that the individual allocations comply. Nor does clipping each fee independently to a perceived state ceiling necessarily preserve the selected federal method.

B3. Dedicated accounts and deduction permission

The federal account provision requires an insured institution, consumer ownership and interest, an independent unaffiliated administrator, no referral compensation, and penalty-free withdrawal with the specified return deadline. These conditions permit accumulation under that federal provision; they do not establish Minnesota custody compliance or provider earning. [S010, §310.4(a)(5)(ii); C026–C027] eCFR

Separately, submitting billing information requires express informed consent to the service charge and identified account; additional requirements apply to preacquired account information. Substantial assistance to a violation can create a separate issue when the knowledge/conscious-avoidance standard is met. [S010, §310.4(a)(7); S012, §310.3(b); C028–C029] eCFR+1

Therefore, a federally compliant account is neither a state-law exemption nor an automatic debit authorization.

CROA boundary: Actual credit-improvement representations could introduce separate credit-repair requirements. This pass does not resolve CROA or TSR credit-repair applicability and does not treat the debt-relief test as clearance for those representations.

C. Actor-by-actor and service-by-service decision table

“Earned” below is shorthand for a fee supported by the relevant contract and statutory predicates. It is not a general accounting-revenue conclusion. A fee can be physically received without being lawfully collectible.

The proposed evidence checklist is an analytical implementation aid, not a claim that these records alone complete every statutory requirement. Its legal predicates are C003–C018 and C022–C031. MN Revisor+2

Four separate money classifications

D. Twelve fresh fictional postures

These are new analytical hypotheticals, not actual borrowers or determinations.

P10 does not announce that a failed settlement leaves the fee intact. It identifies the additional facts required before deciding that question. The federal rule’s treatment of a completed qualifying event cannot substitute for Minnesota’s unresolved performance and cancellation construction. Federal Register+1

E. Four fully worked conditional models

Shared fictional enrollment data

Unless a model expressly changes a fact, all use the same balances:

Agreement execution and federal enrollment: July 6, 2026.

Execution and enrollment occur together so that the two systems’ timing references do not create a hidden difference. No separate creditor fees or later interest are included in these bases. Real records must reconcile any such difference rather than assume equality. Minnesota’s aggregate-debt definition is principal plus interest owed at execution. [S002, §332B.02(4); C003] MN Revisor

All amounts are USD. Calculations retain full precision until the displayed cent; these chosen numbers require no intermediate rounding. Registration, lawful contracting, actual provider eligibility, and other unexamined requirements are assumptions, not findings.

M01 — Correct debt-based calculation; Minnesota earning not established

Contract: 12% of aggregate debt, with federal proportional-debt allocation. Monitoring continues through all settlement installments, followed by a final plan session.

Events

• September 1: provider obtains A’s $3,000 settlement.
• September 2: customer executes the specific creditor agreement.
• September 4 and October 4: customer makes two $300 payments.
• October 20 snapshot: A has eight installments remaining; B and C are unresolved; monitoring and final services are unfinished.
• Prior provider fees received: $0.00.

Calculation

Plain text

State debt-method ceiling:
$30,000.00 × 15% = $4,500.00

Lower contractual total:
$30,000.00 × 12% = $3,600.00

Contractual allocations:
A: $3,600.00 × ($6,000.00 / $30,000.00) = $720.00
B: $3,600.00 × ($9,000.00 / $30,000.00) = $1,080.00
C: $3,600.00 × ($15,000.00 / $30,000.00) = $1,800.00

Check:
$720.00 + $1,080.00 + $1,800.00 = $3,600.00

Under the stated federal facts, A’s result, customer agreement, payment, and proportional amount can satisfy the relevant federal predicates. That does not complete the promised Minnesota work.

October 20 decision

The $720 calculation is correct. Treating it as presently earned would not be. The $3,600 contract figure remains contingent, not a statement of presently payable liability. [C038; underlying C007, C009–C010, C022–C024]

M02 — Completed plan; consistent prior allocation

Contract: 25% of actual provider-negotiated plan savings, allocated across debts by original debt shares. The federal allocation election is C(1), proportional debt, not C(2).

All concessions are attributable to the provider; no independent creditor or consumer concessions are included.

All additional promised services are completed October 2. No fee is collected before then.

Total-fee calculation

Plain text

Final savings:
$30,000.00 − $17,700.00 = $12,300.00

Statutory savings ceiling:
$12,300.00 × 30% = $3,690.00

Lower contractual total:
$12,300.00 × 25% = $3,075.00

Allocation

Plain text

A: $3,075.00 × 20% = $615.00
B: $3,075.00 × 30% = $922.50
C: $3,075.00 × 50% = $1,537.50

Total:
$615.00 + $922.50 + $1,537.50 = $3,075.00

For comparison, applying those same debt shares to the statutory maximum gives $738.00, $1,107.00, and $1,845.00. The contract does not become more expensive merely because the statute permits a larger maximum.

Valid prior-fee check

A’s $615.00 fee is collected October 5, after October 2 completion—not merely after A’s August payment.

Plain text

Lawful contractual total assumed for this model: $3,075.00
Prior fee, under the SAME method and balances:       $615.00
Remaining contractual allocation:
$922.50 + $1,537.50 =                              $2,460.00

Cumulative check:
$615.00 + $2,460.00 =                              $3,075.00

At an October 20 deduction request, $2,460.00 is conditionally supported, assuming valid consent and all other stated legal predicates. Remaining creditor liability is $0.00 under the assumed releases. Remaining provider fee is $2,460.00 before, and $0.00 after, that authorized transfer. No refund-triggering violation is assumed.

Why a federal savings allocation cannot be substituted silently

Applying 25% separately to each debt’s savings would produce:

Plain text

A: $3,600.00 × 25% = $900.00
B: $2,700.00 × 25% = $675.00
C: $6,000.00 × 25% = $1,500.00
Total = $3,075.00

The total is identical, but the allocations are not. A’s $900 exceeds even its $738 share of the statutory maximum in this model.

Nor could an earlier $900 collection be called consistent with the selected $615 allocation:

Plain text

Improper mixed-method cumulative amount:
$900.00 + $922.50 + $1,537.50 = $3,360.00

Difference from the contractual total:
$3,360.00 − $3,075.00 = $285.00

Subtracting the $900 from later fees would not, by itself, establish that the original collection was lawful.

Model result: A conditional completed-plan example with an internally consistent prior fee—not approval of every savings-priced, debt-allocated contract. [C039; underlying C008–C010, C024–C025]

M03 — Partial plan, self-negotiated savings, and cancellation

Purported contract: 25% of provider-negotiated savings on each completed debt, selecting federal C(2). This model tests that structure; it does not approve it under Minnesota law.

Events

• A: provider obtains settlement; customer accepts and pays $2,400 on August 10.
• August 20: provider collects $900, calculated as 25% of A’s $3,600 savings.
• B: unresolved, with $9,000 still owed under the no-additional-accrual assumption.
• C: consumer independently negotiates and pays $9,000 on September 15; provider negotiated no concession.
• Written cancellation notice: October 5.
• Assumed effective cancellation date: October 15. This date is stipulated for the example, not a notice-service computation ruling.
• No additional provider fees received.

The incorrect partial-plan calculation

Plain text

Payments to creditors so far:
$2,400.00 + $9,000.00 = $11,400.00

Incorrect apparent savings:
$30,000.00 − $11,400.00 = $18,600.00

Incorrect 25% fee:
$18,600.00 × 25% = $4,650.00

That $18,600 combines three different things:

Plain text

A provider-negotiated savings:  $3,600.00
B unresolved liability:        $9,000.00
C consumer-negotiated savings: $6,000.00
Total:                        $18,600.00

Only A’s $3,600 is an established provider-negotiated concession in the present facts. B is not settled for zero, and C is not provider-attributable savings.

Conditional final-outcome sensitivity—not a present valuation

Suppose B were eventually paid in full for $9,000 without any provider concession:

Plain text

Final creditor payments:
$2,400.00 + $9,000.00 + $9,000.00 = $20,400.00

Gross reduction:
$30,000.00 − $20,400.00 = $9,600.00

Remove C's independently negotiated reduction:
$9,600.00 − $6,000.00 = $3,600.00

25% contractual savings amount:
$3,600.00 × 25% = $900.00

30% statutory ceiling:
$3,600.00 × 30% = $1,080.00

A’s 20% debt share would be $180.00 of that contractual total, or $216.00 of the statutory maximum. The already collected $900 cannot simply be labeled a proportionally compliant A fee.

Cancellation decision

Under a construction finding no permissible fee earned and no applicable exception, the entire $900 would be excess. This report does not declare that construction conclusively applicable. The alternative computations are diagnostic, not a final refund order. [C040]

M04 — Failed plan, premature receipt, no exception facts

Contract: 25% of provider-negotiated savings, contingent on successful results and completion of promised services.

Facts: No creditor offer, no customer settlement, no creditor payment, no independently obtained substitute settlement, and promised services remain unperformed. None of the factual circumstances listed in §.07(1)(d) is present.

The provider nevertheless receives $750. Separately, $2,000 remains in a qualifying consumer-owned dedicated account. The two amounts are not the same money.

Cancellation and account-exit request are assumed effective October 15.

Plain text

Provider fee received:                         $750.00
Supported collectible fee on these facts:        $0.00
Excess provider fee:                           $750.00

Consumer-owned account funds:               $2,000.00
Permissible earned-fee withholding assumed:       $0.00
Account funds to return:                     $2,000.00

Combined amounts due back from distinct
recipient/holding categories:                $2,750.00

The provider’s excess-fee return is immediate; the separate account-return provision uses seven business days from the request. The latter does not extend the former. No calendar deadline is calculated without the necessary business-day assumptions.

Remaining creditor debt is $30,000 under the no-accrual assumption. No fictional “$30,000 savings” arises because no creditors were paid.

A separate material-violation rescission, if established and exercised, invokes §332B.12; it is not presumed merely because ordinary cancellation occurred. [C041; underlying C011, C014–C017, C027]

F. Effect on P01 examples—holds preserved

No original balance, calculation, or access history is rewritten. [C042]

G. Source register

Access convention: “Fresh” means retrieved through regular-Chat public web tools during this October 27, 2026 research session. It does not assert an unavailable individual fetch timestamp. Section pages are separately retrieved bodies; multiple sections of the same chapter or CFR part are not independent corroborating authorities.

Interpretation-search record

The bounded search included combinations of:

"332B.09" "fully performed" court "332B.09" savings opinion "332B.09" site:mncourts.gov "332B.09" site:mn.gov order "332B.09" site:govinfo.gov "332B.07" rejected court "332B.07" Notwithstanding decision

Results included statutory bodies, historical legislation, complaint material, and unrelated references. No opened published judicial-majority decision or binding administrative interpretation resolved the three precise questions: whole-agreement performance, interim partial-plan savings, or the unusual §.07(1)(d) interaction.

This is a bounded search finding—not proof that no responsive authority exists. No unpublished opinion is relied upon, so no unpublished-precedent status is asserted.

H. Atomic claim register

Confidence: “Text—high” means the retrieved wording supports the assertion, subject to the stated version limit. “Conditional” identifies an inference or hypothetical application. “Held” means the decisive interpretation or facts remain missing.

I. Granular component coverage and next evidence

J. Researcher self-check and disposition

Actually read: The specified Minnesota statutory bodies and histories; the enacted 2013 fee change and its agreement-date applicability; targeted 2026 regular-session index entries; operative federal definitions, fee conditions, relevant exemptions, account conditions, consent and assistance provisions; responsive portions of the Commission’s final-rule explanation; and limited FTC/Attorney General guidance.

Not established: A controlling Minnesota interpretation resolving whole-agreement versus debt-unit completion, collectible interim plan savings, or §332B.07(1)(d)’s relationship to the later fee-performance structure. No party allegation, headnote, search snippet, generic consumer warning, or unpublished opinion was substituted for such authority.

Preserved limitations: The Minnesota pages’ displayed version, the eCFR’s October 23 update limit, P01–P04 provenance, and all deferred entity, contract, custody, operational and broader-jurisdiction questions remain visible. No individual source-fetch timestamps, independent-review status, model tier, local-file creation, or publication readiness are claimed.

Bottom line: This pass supports a conditional completed-plan calculation and demonstrates why several apparently correct interim calculations fail to establish Minnesota earning. It does not supply the missing Minnesota authority needed to convert a first payment, partial settlement, or federal savings allocation into general permission to collect.

END S_MN PASS-05