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

S_MT PASS-01 — Montana provider market access and consumer fees

SettleADebt.com | Individual state investigation | Research access: October 24, 2026 | Baseline: October 22, 2026

Research status: PARTIAL — substantive statutory pathways identified; several current-law, fee-timing, regulatory and operational questions remain held.

A. Substantive findings

Montana has two materially different regulatory pathways for consumer debt services. This distinction is fundamental to determining whether SettleADebt.com could lawfully refer consumers to, advertise for, or operate through a particular provider.

The Montana Department of Justice expressly distinguishes debt management licensing from debt settlement registration. Its operational guidance identifies a $1,000 annual debt management license fee and a $250 annual debt settlement registration fee. These are government charges to providers, not fees that providers may automatically collect from consumers. Montana Department of Justice+2

1. Classification and market access

Noncustodial settlement — Part 21. MCA §30-14-2101 defines a debt settlement provider by compensated settlement activity, including holding itself out as offering the activity, where the provider does not ordinarily hold, receive or disburse debtor funds. Debt settlement services include negotiation, adjustment or settlement of a consumer's debt without handling those funds.

The statute expressly excludes several categories, including specified professionals acting in the ordinary practice of their professions, enumerated financial institutions, certain employees, public officials, business liquidators and entities governed by Part 20. Those exclusions have factual conditions; an attorney connection or nonprofit corporate status alone does not establish one. Montana Code Annotated+1

Custodial debt management — Part 20. MCA §30-14-2003 defines a debt management plan around a written arrangement in which a credit counseling service receives consumer money to distribute to creditors. Its consumer definition is tied to individual personal, family or household obligations. MCA §30-14-2002 expressly applies to providers offering plans to Montana residents, supporting application to out-of-state providers serving those residents. Montana Code Annotated+1

Part 20 excludes certain financial institutions, qualified Montana-licensed attorneys and CPAs whose counseling services are incidental rather than their principal business, and debt collectors that do not present themselves as credit counseling services. Justia Law

Important boundary: A provider cannot obtain the benefit of Part 21's noncustodial classification merely by calling a custodial debt management arrangement a settlement program. Conversely, the mere fact that a provider negotiates a reduced payoff does not establish that it receives and distributes consumer funds.

2. Consumer fees

Two distinct fee structures have been identified.

The debt management figures appear in the published text of ARM 23.19.1005, which also requires unrelated service charges to be reasonable and not tied to debt management services. The source records a January 27, 2006 effective date and February 10, 2006 transfer, but the current official regulatory compilation and any later amendments remain to be verified. Justia+1

For settlement, Montana's enacted 2009 HB 318 contains the 5% setup and 20% other-fee limits. Its text must be reconciled against the operative 2025 MCA §30-14-2103 and any subsequent legislative amendments before those figures are treated as independently current-verified ceilings. Montana Legislature+1

3. Fee timing and refunds

MCA §30-14-2010 requires a signed, dated debt management plan before consideration may be required or accepted for covered services. Its subsection (4) imposes additional restrictions, including limits on initial fees, maintenance fees, bundled services and unauthorized charges.

A material consequence is that, outside the statutory bona fide error qualification, unauthorized fees can void the plan and require return of all fees received from or on behalf of the consumer. Justia Law

The enacted debt settlement legislation separately requires a signed contract specifying actual fees and when they will be charged. It also contains a cancellation provision concerning 50% of certain collected, unrefunded service fees, calculated pro rata for accounts without settlement offers, on the debtor's request. Setup fees are treated differently. The exact current statutory text and interaction with federal advance-fee restrictions remain verification holds. Montana Legislative Archive

A Montana fee ceiling is not permission to collect an advance fee. Federal Telemarketing Sales Rule debt-relief restrictions must be assessed independently for covered telemarketing transactions. Federal text and exemptions have not yet been fully read in this pass, so no final collection schedule is approved.

4. Direct verification of current settlement fee law

The official 2025 Montana Code Annotated, opened during this research, confirms the settlement fee provisions in §30-14-2103(1)(b). The earlier historical-only hold can therefore be narrowed: the 5% and 20% figures are confirmed in the published 2025 code, although a separate post-codification legislative-effectiveness check remains open.

Crucially, the text says that fees other than setup fees may not exceed 20% of the principal amount and setup fees may not exceed 5%. It does not say the two categories share one 20% aggregate cap. Nor does that wording independently authorize collecting the full combined ceiling. Montana Code Annotated

Additional prohibitions relevant to the business model include compensation from persons other than the debtor or someone acting on the debtor's behalf, restrictions on creditor and debtor information, and advertising before filing a financial statement with the attorney general. These provisions create a significant unresolved question for affiliate and lead-generation compensation arrangements. Montana Code Annotated

The official §30-14-2102 also confirms a $250 annual filing charge, required financial statement, specified provider-identification information, insurance with at least $100,000 coverage and a deductible not exceeding $10,000, and prescribed written disclosures before contracting. These are operative statutory requirements distinct from an agency's application checklist. Montana Code Annotated

5. Federal fee timing — directly checked

The eCFR displays Title 16 as updated through October 22, 2026. The text of 16 CFR §310.4(a)(5)(i) was directly opened.

For a covered debt-relief telemarketing transaction, a fee cannot be requested or received until all relevant conditions are satisfied:

1. At least one debt has been renegotiated, settled, reduced or otherwise altered under a qualifying executed agreement.
2. The consumer has made at least one payment under that agreement.
3. For individually resolved debts, the provider uses a compliant proportional-enrolled-debt or constant-percentage-of-savings fee allocation.

A mere enrollment, creditor offer, signed settlement without the required payment, or consumer deposit into a dedicated account does not itself establish that a service fee has been earned.

The rule separately permits qualifying dedicated accounts subject to conditions concerning the financial institution, consumer ownership, account-administrator independence, referral compensation, withdrawal and refunds. eCFR

For telemarketed services represented to improve credit history or remove derogatory information, §310.4(a)(2) imposes a different credit-repair fee-timing rule involving the represented performance period and a qualifying consumer report issued more than six months after results are achieved. Its coverage cannot be inferred solely from a provider's debt settlement label. CROA and the TSR's exemptions remain separately held. eCFR

6. Operational permission and verification

Montana DOJ's Office of Consumer Protection provides separate debt management and debt settlement application processes. Its published debt settlement instructions require annual registration, a $250 filing fee and notarized compliance documentation; registration expires January 31. Debt management licenses expire February 1. Montana Department of Justice

The DOJ's debt settlement checklist asks for the provider's standard agreement, disclosures, cancellation/refund policy, qualification standards, internal do-not-call policy and all fees involving the provider and third-party designees. This is useful operational evidence, but it does not establish that any particular applicant has been registered. Montana Department of Justice

The DOJ also publishes a list of licensed debt management companies. That list is not interchangeable with a current debt settlement registration lookup. Montana Department of Justice

Market-access determination: Montana has an identifiable statutory registration pathway for qualifying noncustodial settlement providers and a licensing pathway for qualifying debt management providers. This is not a determination that SettleADebt.com or any partner currently holds the required authorization.

B. Source register

All source IDs are unique to this Montana PASS-01. Access date is October 24, 2026. “Read” means operative text was returned and inspected; “excerpt” means only the displayed passage was examined. A source's publication or crawl date is not treated as its legal effective date.

The directly opened official Montana provisions and federal text are supported by the corresponding primary-source results. Montana Code Annotated+3

Still missing from the primary-source register: the full official current ARM chapter, relevant adoption/amendment notices, complete current application instructions for both programs, any controlling Montana judicial construction of ambiguous fee provisions, and a complete 2026 legislative-change check. Those sources are not silently treated as verified.

C. Claim register

Confidence describes the strength of the evidence actually examined, not an independent legal opinion.

No claim in this register asserts that the two settlement percentages may necessarily be added into a collectible 25% fee. C011 and C012 establish distinct statutory ceilings, not a completed federal or contractual permission analysis.

D. Worked examples and classification tests

These are arithmetic and statutory-boundary demonstrations, not approved Montana consumer fee schedules.

Example 1 — Settlement ceiling, $20,000 enrolled

Assume an individual enrolls $20,000 in qualifying consumer debt with a provider covered by Part 21.

• Setup ceiling: $20,000 × 0.05 = $1,000.
• Other-fee aggregate ceiling: $20,000 × 0.20 = $4,000.
• Arithmetic sum of separate ceilings: $5,000.

All amounts are dollars, calculated to the cent without intermediate rounding.

The $5,000 figure is not a determination that the provider may contract for or collect that sum. Actual fees must satisfy contract, state and applicable federal timing rules. If the TSR applies, a $1,000 upfront setup charge cannot be collected merely because Montana establishes a 5% ceiling.

Claims: C002, C011–C013, C025.

Example 2 — Lower enrolled debt

Principal amount at enrollment: $4,000.

• 5% setup ceiling: $200.
• 20% other-fee aggregate ceiling: $800.
• Separate ceiling arithmetic: $1,000.

This illustrates that the state percentages are tied to the defined principal base, not automatically to settlement savings or the eventual amount paid to the creditor.

Claims: C002, C011, C012.

Example 3 — Partial settlement under a consistent TSR allocation

Assume the TSR applies and the provider uses the proportional-enrolled-balance method, with a hypothetical $3,000 total contracted service fee, excluding any separately discussed setup fee.

Enrollment:

Calculation: Debt A fee = $3,000 × ($4,000 ÷ $20,000) = $600.

Suppose Debt A is settled for $2,200, an executed settlement agreement exists, and the consumer makes the first required payment. The federal conditions could permit the allocated $600 to be requested, assuming all other legal requirements are satisfied.

If Debt B later reaches the same performance triggers, the additional allocated fee is $900. Cumulative potentially earned service fees become $1,500, leaving $

…$1,500 allocated to Debt C and still unearned.

The same allocation and performance method must remain in place across all three debts:

• Debt A: $600 allocated fee; earned only after Debt A satisfies the executed-resolution and qualifying-payment conditions.
• Debt B: $900 allocated fee; earned only after Debt B separately satisfies those conditions.
• Debt C: $1,500 allocated fee; not earned merely because the consumer made a payment on Debt A or Debt B.

Thus, after qualifying performance on Debts A and B, the internally consistent result is:

$600+$900=$1,500 potentially earned$600+$900=$1,500\text{ potentially earned}$600+$900=$1,500 potentially earned$3,000−$1,500=$1,500 remaining allocation to Debt C$3,000-$1,500=$1,500\text{ remaining allocation to Debt C}$3,000−$1,500=$1,500 remaining allocation to Debt CIf Debt B merely receives an offer, but the consumer has not executed the qualifying agreement and made the required first payment under that agreement, only Debt A’s $600 could potentially be earned. The remaining $2,400 would not yet satisfy the stated federal performance method.

The hypothetical $3,000 total contracted service fee equals 15% of the same $20,000 enrolled principal:

$3,000÷$20,000=15%$3,000\div $20,000=15%$3,000÷$20,000=15%That is numerically below the examined Montana 20% ceiling for nonsetup fees. It does not by itself establish lawful collection. It does not resolve federal coverage, contract compliance, Montana registration, whether any separate setup fee was contracted, or cancellation and refund consequences. No percentage-of-savings method may be substituted midway merely because it would produce a more favorable result.

Claims: S_MT-P1-C002, C011–C013, C025.

Example 4 — Debt-management monthly charge

Assume a covered debt-management plan requires a $240 monthly consumer payment.

Under the examined ARM text:

15%×$240=$3615%\times $240=$3615%×$240=$36The lesser of $50 or $36 is $36. Therefore, the provisional monthly maintenance ceiling is $36.

If the provider charges:

• $30 labeled “maintenance”; and
• $10 labeled “monthly administration”;

the examined anti-relabeling provision treats both recurring charges as monthly maintenance charges. The combined $40 would exceed the $36 ceiling by $4.

A separate initial consultation charge could not exceed the examined $75 ceiling, but it still would require compliance with the applicable written-plan and fee prerequisites. These results remain provisional because the official current ARM compilation, complete amendment history, and any operative exception or waiver branch were not fully verified.

Claims: S_MT-P1-C017–C021.

Example 5 — Cancellation after two completed debts

Preserve the Example 3 facts:

• Debt A allocated fee: $600.
• Debt B allocated fee: $900.
• Debt C allocated fee: $1,500.
• Total contracted service fee: $3,000.
• Debts A and B have separately satisfied the stated performance conditions.
• Debt C has not received a qualifying settlement offer and has not satisfied the federal collection trigger.

On those facts, $1,500 has potentially been earned under the consistent allocation method and $1,500 remains allocated to Debt C.

No exact Montana cancellation refund can be calculated from those facts alone. The examined state provision refers to a requested 50% refund of specified collected, unrefunded service fees, allocated pro rata to accounts without settlement offers. Applying it requires facts not supplied here, including:

• Exactly which fees were collected.
• Which debt each collection was allocated to.
• Whether Debt C had any settlement offer.
• Whether an amount was already refunded.
• The contract’s lawful allocation terms.
• Whether any collection for Debt C occurred before federal performance.

If no amount was collected for Debt C, there is no Debt C collection from which to calculate a numerical refund. If $1,500 had been collected for Debt C before its performance trigger, Montana’s refund language would not transform that premature collection into an earned fee; federal legality and available remedies would require separate analysis.

Claims: S_MT-P1-C016, C025. The exact state cancellation allocation remains held.

Example 6 — Custody changes the classification

Model A: A provider negotiates reductions but never receives, holds, or distributes the consumer’s money. That is a Part 21 candidate, subject to the actual statutory definition, exclusions, registration, contract, disclosure, fee, and advertising conditions.

Model B: The same provider begins receiving monthly consumer funds and distributing them to creditors. The noncustodial assumption has failed. Part 20 debt-management coverage—or another hybrid classification—must be analyzed before fees are modeled.

Calling Model B “debt settlement” does not preserve Model A’s classification. No lawful Model B fee scenario is established merely from the Part 21 percentages.

Claims: S_MT-P1-C001, C004–C007.

Component coverage and gap table

Remaining holds

No conclusion in this continuation establishes that:

• A particular provider is registered or licensed.
• Montana permits advance collection merely because a percentage ceiling exists.
• A nonprofit, attorney-affiliated, creditor-affiliated, or referral model is exempt.
• A dedicated account avoids Montana classification or federal timing.
• The examined ARM amounts remain unchanged through October 24, 2026.
• CROA does or does not apply to a particular marketing presentation.
• The state cancellation provision yields a specific refund without account-level facts.
• SettleADebt.com’s contemplated role is outside Parts 20 or 21.

The provider-access and fee component therefore remains partial and unaccepted, with all parent-dossier, A066, operational, and publication decisions reserved.

Researcher self-check

Actual research access date: October 24, 2026. This continuation adds no new browsing or source access; it completes omitted output using the preserved PASS-01 record.

Actually opened and read in the preserved research: official 2025 Montana pages for §§30-14-2102 and 30-14-2103; the operative displayed text of 16 CFR §310.4(a)(2) and (a)(5); selected statutory excerpts or reproductions for §§30-14-2101, 30-14-2002, 30-14-2003, 30-14-2004, and 30-14-2010; the reproduced ARM 23.19.1005 text; selected Montana DOJ operational-page and checklist passages; and selected enacted HB 318 passages.

Read only as excerpts, reproductions, or limited portions: the current §30-14-2101 route, several Part 20 provisions, the DOJ application checklist, the debt-relief listing, and the historical bill. Those materials were not treated as complete operative verification where the full current official source was not opened.

Discovery or incomplete operational evidence: agency page titles, available company-list material, form references, enforcement indexes, and search-rendered passages. They establish routes or limited procedure, not complete legal permission or a named provider’s current status.

Not fully read or verified: the complete official current ARM chapter and adoption orders; all current application forms; a current settlement registry; post-2025 Montana legislative changes; future-effective or proposed provisions; controlling Montana decisions; complete TSR exemptions; CROA; FTC interpretive materials; and the later-pass agreement, funds, bond, remedies, collection, limitation, secured-debt, sector, local, and tribal issues.

No foundation cell was accepted as evidence-backed Montana coverage. No CAPTCHA workaround, contact, application, account change, private-data access, local write, publication, or independent review occurred. Search-rendered excerpts were not treated as complete operative verification.

REPORT PARTIAL — S_MT PASS-01 provider-access/fees component only.

END S_MT PASS-01

END S_MT PASS-01-CONTINUATION-01