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

SettleADebt — S_ND PASS-02

Four remaining fee-timing and refund questions

Fresh source-access date: October 27, 2026, Pacific. Scope: Only the four specified North Dakota fee-timing/refund questions and the public-law provisions necessary to analyze them.

Overall result: PARTIAL. The freshly read authorities clarify several important boundaries, but none of the four remaining interpretive questions can be marked fully resolved. In particular, this pass did not recover an authoritative interpretation permitting first-installment settlement fees, authorizing a consumer application fee, selecting the Chapter 13-07 gross/net calculation, or prescribing a universal Chapter 13-07 cancellation-refund formula.

P01’s recorded provenance and coordinator-review status remain unchanged. This is a new scoped research pass, not an independent review or a determination concerning an actual provider, contract, account, or borrower.

Identifier convention: Below, S001 means S_ND-P2-S001, and C001 means S_ND-P2-C001. Full identifiers appear in the registers.

Before/after proposition map

A. Substantive findings

1. Chapter 13-11: installment settlements and fee collection

1.1 The operative provisions address different events

The relevant definitions use the balance enrolled when the consumer enters the contract—not an assumed original loan principal. “Savings” compares that enrolled amount with the amount paid under the negotiated full-satisfaction settlement. The settlement-fee definition refers to a completed creditor agreement or arrangement, while §13-11-21(4) separately restricts collection of the fee. These provisions do not expressly define a fraction of the fee as earned with each installment. C001–C004; S001, §13-11-01(11), (13)–(14), §13-11-21(4). North Dakota Legislative Branch+1

Section 13-11-21(4) requires both:

1. A legally enforceable creditor agreement accepting a specified dollar amount in full satisfaction of the debt; and
2. Provision of “those funds” by the provider on the consumer’s behalf or directly by the consumer pursuant to the provider-negotiated settlement.

Section 13-11-23(1)(k), meanwhile, permits the relevant representation when the creditor has certified either full settlement or inclusion of the payment in a payment plan that will produce full settlement upon completion. The latter recognizes a valid installment arrangement; it does not expressly amend the separate fee-collection condition. C002–C003. North Dakota Legislative Branch+1

1.2 Reconciliation supported by the text, but not conclusively adjudicated

The strongest harmonized reading is that a provider may negotiate and accurately describe a creditor-certified installment settlement before it has satisfied the conditions for collecting its fee.

That is a textual interpretation, not a recovered DFI interpretation or controlling holding. The alternative argument—that providing an installment is sufficient provision of “those funds”—was not authoritatively established by the sources recovered here. Nor was an authoritative rule found allowing the provider to earn one-third of its fee when one-third of the settlement amount is paid. C004; S001 and S003. North Dakota Legislative Branch+2

Conditional operating boundary: Until a controlling interpretation establishes otherwise, do not collect the Chapter 13-11 fee merely because the creditor signed an installment settlement or received its first installment. Wait until the full specified settlement amount has been provided, then separately verify the contract, fee ceiling, assent, and any applicable federal conditions. This is a conservative boundary, not a holding that every possible installment arrangement has been judicially resolved against earlier collection.

Two additional conditions remain material. The fee may not exceed 30% of statutory savings, and a settlement exceeding 50% of the enrolled principal requires consumer assent after creditor assent. Satisfying those conditions does not itself satisfy the collection trigger. C005, C046. North Dakota Legislative Branch

1.3 Conditional federal overlay: complete relevant conditions

Only where the particular activity is independently covered by the Telemarketing Sales Rule, §310.4(a)(5)(i) prohibits requesting or receiving a fee before:

• A valid customer-executed agreement changes at least one debt;
• The customer makes at least one payment under the agreement with the creditor or collector; and
• For individually resolved debts, the fee follows either the enrolled-balance proportional allocation method or the same percentage-of-savings method across individual debts. C006–C007. eCFR

The dedicated-account provision is also conditional. All five requirements must be met: an insured financial institution; customer ownership and receipt of accrued interest; an administrator not owned, controlled by, or affiliated with the debt-relief service; no compensation for referrals involving the service; and withdrawal without penalty, with the customer receiving account funds other than fees properly earned under the federal conditions within seven business days of the request. C008. eCFR

Consequently:

• Federal first-payment eligibility does not resolve North Dakota’s additional funds-provision language.
• State trust-account compliance does not establish federal account independence or customer-interest compliance.
• North Dakota’s seven-day cancellation-refund provision is not the same event, obligation, or time unit as the federal seven-business-day account-return condition.
• Neither provision is an independently verified bank-transfer processing rule. C009. North Dakota Legislative Branch+2

No professional exemption, CROA coverage, or credit-repair representation is assumed.

2. Chapter 13-11: cancellation, material violation, application fees, and invalid contracts

2.1 The application-fee inconsistency remains literal and unresolved

Section 13-11-20(2) excepts an “application fee” and an earned settlement fee from its refund direction. But §13-11-21 permits only the types, amounts, and timing of consumer compensation authorized there, and prohibits enrollment, setup, upfront, and maintenance fees. It does not authorize a consumer application fee. C014. North Dakota Legislative Branch

The original enrolled 2011 HB 1038 already contained both provisions. Thus, the inconsistency is not explained by treating one as a freshly discovered later amendment superseding the other. The enactment alone does not disclose why the application-fee exception was included. C015; S011, §2, printed pp. 12–13, PDF indices 11–12. North Dakota Legislative Branch+1

North Dakota’s construction rules address ordinary meaning, harmonization, and the treatment of apparent drafting errors, but do not permit this researcher to declare statutory words deleted without establishing the necessary legislative intent. No recovered interpretation does that work here. C014; S003, §§1-02-02–08. North Dakota Legislative Branch

Result: No lawful consumer application-fee pathway has been established. Do not charge or retain one based solely on §13-11-20’s exception.

The $400 investigation fee in §13-11-04 is a provider-to-state licensing charge, not an authorized consumer charge. The DFI’s generic application-fee instructions do not change that distinction. C016. North Dakota Legislative Branch+1

2.2 Distinct cancellation and recovery branches

The operative distinctions above come from the freshly read complete interacting provisions, not from an assumed general refund policy. North Dakota Legislative Branch+2

2.3 Refund accounting, payment authority, and creditor notice

The cancellation accounting must show fees received and refunded, savings held, creditor payments, settlement fees earned, and savings refunded. Cancellation revokes the provider’s powers of attorney and direct-debit authorizations. The provider must give timely cancellation notice to creditors with whom it previously communicated for the consumer. Chapter 13-11 does not substitute Chapter 13-07’s separate 30-day creditor-notice wording. C012–C013. North Dakota Legislative Branch

Section 13-11-23 also restricts post-termination exercise of a power of attorney and account transfers. Thus, a claimed fee entitlement does not automatically authorize a post-cancellation debit using revoked authority. C013. North Dakota Legislative Branch

The state’s seven-day period is stated in days, not business days, and is subject to applicable North Dakota time-computation law. Section 1-02-15 generally excludes the first day and includes the last, with its holiday qualification. This report does not calculate an actual deadline without an actual operative notice date. C045. North Dakota Legislative Branch

3. Chapter 13-07: initial fee base and residual collection

3.1 What the current text establishes

Section 13-07-06 authorizes an origination fee up to $50, which may be subtracted from the initial payment. It separately permits withdrawal and retention, as partial payment of the service’s total fee, of up to 15% of a sum deposited for distribution. Section 13-07-02 requires disclosure of the total retainable amount if the contract is fully performed. C021–C023. North Dakota Legislative Branch

The original 1993 enactment used the same relevant $50, 15%, distribution, cancellation, and creditor-notice wording. It supplies historical confirmation—not an explanation selecting one first-deposit formula. C026; S012, Chapter 139, §§2, 4–6, printed pp. 595–596, PDF indices 3–4. ndlegis.gov

3.2 Gross versus net remains an interpretive hold

Two readings remain possible on the recovered text:

Net-base reading: The $50 allocated to origination is no longer a sum “for distribution,” so the percentage applies to the remaining distribution amount.

Gross-base reading: The initial payment was a sum deposited for distribution before the origination withdrawal, so the percentage applies to that original deposit.

The statute does not expressly say “before” or “after” the origination deduction. Neither the recovered enactment nor the inspected generic AG materials supplies the missing instruction. C024. North Dakota Legislative Branch+2

A lower deduction may be a conservative proposal, but it is not an officially established safe harbor. In particular, $102.50–$110 must not be described as a legally allowed range for a $400 initial payment. Those are the results of two different unverified interpretations.

3.3 “Partial payment” does not resolve residual fee collection

The phrase “partial payment of the service’s total fee” can support an argument that a contract has a total fee not exhausted by one deposit. It does not specify when a remaining balance becomes earned, whether it can be collected outside deposits, or whether cancellation accelerates it.

Conversely, Chapter 13-07 does not contain the same express exclusive-fee wording as §13-11-21. Therefore, this pass does not establish either a blanket permission or a blanket prohibition for every possible separately collected residual fee. C023, C025. North Dakota Legislative Branch

The missing evidence is an authoritative interpretation and, for a particular transaction, the actual provisions defining total compensation, earning milestones, allocation, separate collection, and cancellation. A disclosed full-performance maximum is not automatically an amount owed after partial performance.

Separately charging the origination fee does not avoid §13-07-04: that section covers any payments received from or on behalf of the debtor, requiring trust deposit within one business day and identifiable, noncommingled funds. The weekly accounting must distinguish receipts, disbursements, fees, and escrow funds; a debtor’s copy is available upon request, rather than automatically required to be delivered weekly. C027–C028. North Dakota Legislative Branch

4. Chapter 13-07: cancellation, retained fees, and pending trust money

4.1 The chapter supplies several clocks—but no express universal refund clock

C027–C032. The operative cancellation date and any pending payment instructions require the actual agreement and valid notice facts. North Dakota Legislative Branch

4.2 Pending money and previously retained fees are separate questions

The chapter requires identifiable debtor payments and distribution according to the agreement. It does not say that an undisbursed balance becomes provider compensation when the relationship ends. But identifying the final recipient requires separating:

• Amounts lawfully earned by the provider;
• Money subject to valid, surviving creditor-payment instructions; and
• Uncommitted money returnable to the debtor under the governing agreement and applicable law.

The statute alone does not establish that every previously retained fee is earned, that every such fee must be refunded, or that every pending dollar belongs immediately to the provider or a particular creditor. C032–C033. North Dakota Legislative Branch

In Heitkamp, the Supreme Court upheld the finding that the service failed to comply with §13-07-06 when it left a closed client-account balance unresolved and made no effort to determine the rightful owners. The opinion quoted the statute’s 45-days-after-deposit distribution language. That supports a prohibition against treating closed-account money as indefinitely available to the service; it does not furnish a universal cancellation-refund formula or replace the statutory event with “45 days after cancellation.” C040. Justia Law

4.3 Conditional contract-law timing

North Dakota contract law requires the written agreement to be read as a whole and interpreted lawfully. Section 9-07-22 supplies a timing rule when the contract leaves time unspecified: generally reasonable time, with a more immediate rule for an act capable of immediate performance that consists only of paying money once the amount is exactly ascertained. C033–C034. North Dakota Legislative Branch+1

That provision is useful after a refund obligation and its amount have been established. It does not create an otherwise unproved refund entitlement, decide gross versus net fees, establish who owns a disputed balance, or dictate an electronic bank-transfer method.

Relevant contract limitations also remain. Sections 9-08-01–04 address unlawful contractual objects, attempted exemption from responsibility for specified wrongful conduct, and penalty or liquidated-damages clauses. They require analysis of the actual clause; they do not make every cancellation charge automatically valid or automatically invalid. C035. North Dakota Legislative Branch

4.4 Uniform Trust Code: possible, not automatic

Section 59-09-02 limits the Uniform Trust Code’s coverage and expressly excludes several arrangements, including specified professional client accounts, single-transaction or escrow funds, trusts created by depository agreements, and resulting or constructive trusts.

Accordingly, a Chapter 13-07 account’s statutory “trust” label does not prove that §59-16-17 applies. The actual trust instrument, account agreement, administrator’s role, and relevant exclusion must be examined. C036. North Dakota Legislative Branch

If the Uniform Trust Code applies and an event terminating the trust has occurred, §59-16-17 requires expeditious distribution to the entitled persons, subject to a reasonable reserve for debts, expenses, and taxes. Its separate proposed-distribution objection procedure is not a general 30-day refund waiting period. Nor does its reserve language independently authorize a counseling fee prohibited by other law. C037. North Dakota Legislative Branch

4.5 Rescission, restitution, and AG restoration are distinct avenues

Rescission. Sections 9-09-02 and 9-09-04 address grounds such as fraud or failure of consideration and, subject to their exceptions, prompt action and restoration or an offer to restore what was received. Ordinary prospective cancellation is not automatically rescission of the entire completed relationship. C038. North Dakota Legislative Branch

Unjust enrichment. In Lund, the Supreme Court applied the requirements of enrichment, corresponding impoverishment, connection, lack of justification, and absence of a legal remedy. It rejected recovery on the facts, including reciprocal benefits. This is not a rule that all counseling fees must be returned merely because the consumer later cancels, and it does not override §13-11-28(3)’s particular bar against provider restitution claims in the unlicensed-contract branch. C039. Justia Law+1

AG restoration. Chapter 13-07 supplies an enforcement route, and §51-15-07 permits court-ordered restoration of money or property obtained through unlawful conduct in the relevant AG proceeding. That requires the necessary legal predicate and court relief; it is not an automatic refund or an individual award equal to an agency civil-penalty maximum. C041. North Dakota Legislative Branch+1

4.6 Exact missing contractual provisions

An individual Chapter 13-07 result requires, at minimum, the clauses addressing:

1. Whether the disclosed total includes origination, the percentage base, and when each component is earned;
2. Apportionment on partial performance, residual collection, acceleration, and any purported nonrefundable fee;
3. Cancellation delivery, effective date, automatic termination, refund timing, and surviving creditor-payment instructions;
4. Ownership and disposition of pending funds, account-administration terms, and any release or reserve provision.

The transaction ledger must also identify actual receipts, lawful fee withdrawals, creditor payments, outstanding checks or instructions, and the cancellation event. None was supplied or queried. C023–C025, C032–C038.

B. Complete source register

Access convention: Every entry below was checked or attempted on October 27, 2026, Pacific. “Current code” means the canonical official code body displayed on that date; it is not a claim that a complete later-law or historical-effective-date audit was performed. Printed pages and zero-based PDF indices are both supplied where known.

B.1 Governing text and historical enactments

B.2 Generic agency materials, published opinions, and discovery sources

B.3 Source-access failures and recovery limits

These entries are part of the source register, but not read legal authorities.

No failed route was converted into evidence that an interpretation, rule, or document does not exist.

C. Atomic claim register

Confidence convention: High—text means the proposition is directly supported by the selected current text or the described published holding. Conditional means legal applicability or transaction facts remain unproved. Held means the requested interpretation was not established. All current-code claims retain the currentness limits in C043.

C.1 Installment and federal interaction claims

C.2 Chapter 13-11 cancellation and invalidity claims

C.3 Chapter 13-07 fee and cancellation claims

C.4 Trust, restitution, authority, and research-limit claims

D. Source-limited published-case comparison

No unpublished decision is relied upon. No blanket unpublished-opinion citation rule is asserted. Neither case was investigated through a docket, case-status, or private-record query.

E. Conditional worked models

These models supplement rather than replace P01’s examples. All figures are USD, calculated to the nearest cent; the displayed operations produce exact cents. Arithmetic does not establish a license, exemption, lawful account, valid contract, or earned fee.

Model 1 — Installment settlement: federal eligibility is not state permission

Hypothetical contractual facts

• One enrolled debt: $10,000.00.
• Creditor-certified settlement: three payments of $2,000.00, totaling $6,000.00.
• Contract fee: the lesser of $1,200.00 or 30% of actual statutory savings, payable only when legally permitted.
• No previous fee has been collected.
• Because settlement is60% of enrolled principal, assume the consumer assented after the creditor.
• Assume TSR coverage solely for this model.

Full-settlement calculation

Plain text

Enrolled balance                         $10,000.00
Less full settlement amount              $6,000.00
Savings                                  $4,000.00

$4,000.00 × 0.30 =                        $1,200.00 state ceiling
Contract fee = min($1,200.00, $1,200.00) = $1,200.00

After only the first $2,000 payment

Assuming the valid customer-executed agreement and first-payment conditions, the federal proportional-allocation calculation for this single-debt program is:

Plain text

$1,200.00 total fee × ($10,000.00 ÷ $10,000.00) = $1,200.00

That calculation does not establish North Dakota collection permission. The first-installment interpretation remains held. Under the conservative state boundary, no fee collection is approved at that point. Nothing establishes a $400 installment fee merely because one-third of the settlement has been paid. C002–C007.

After the full $6,000 is provided

The possible fee is $1,200, but only if the remaining state, contractual, and applicable federal requirements are satisfied. This is not automatic earning from balance conservation.

Smaller failure branches

• Money merely accumulated without the required enforceable agreement does not establish the state trigger.
• If the actual full-satisfaction amount becomes $9,000, savings are $1,000 and the contractual/state ceiling becomes $300, not $1,200.
• If the satisfaction amount equals the enrolled balance, savings and the percentage fee are zero.
• Calculating “savings” as $10,000−$2,000 after the first installment would incorrectly treat the unpaid remainder of the settlement as savings. C001, C005.

Model 2 — Cancellation after one settled debt: consistent method and prior fee

**One method throughout:**30% of actual statutory savings on each qualifying completed debt.

Enrolled debts and contractual total

The contract’s total fee is the sum produced by that same30%-of-savings formula—not an unrelated fixed enrolled-balance charge. A good-faith estimate of $1,800 could have assumed A settled for$3,000 and B for$6,000:

Plain text

Debt A: ($5,000 − $3,000) × 30% =   $600
Debt B estimate: ($10,000 − $6,000) × 30% = $1,200
Estimated full-program fee =       $1,800

The estimate does not make B’s $1,200 earned or payable.

Assume A’s full settlement was paid, the consumer gave the required post-creditor assent, and all state, contract, and applicable federal conditions for its $600 fee were met.

Ledger before ordinary cancellation

Plain text

Total consumer money received       $4,800.00
Paid to creditor A                  $3,000.00
Lawfully earned fee A                 $600.00
Uncommitted settlement funds         $1,200.00
Check: 3,000 + 600 + 1,200 =          $4,800.00

On ordinary cancellation, the model identifies $1,200 for return and $600 as retainable under the assumed lawful earning predicates. The $3,000 actually paid to creditor A is not included in the ordinary settlement-account refund. The state refund/accounting clock is seven days after cancellation notice. C010, C012, C020.

Unauthorized later-fee branch

Suppose the provider already took $300 for unresolved Debt B from that same $1,200:

Plain text

Pending money still held             $900.00
Unearned B fee withdrawn             $300.00
Identified return components       $1,200.00

The arithmetic does not settle the whole legal result. Imposition of an unauthorized fee implicates §13-11-28(1)’s void-contract branch, so continued retention of the earlier $600 cannot simply be assumed. Nor does that fact alone prove a particular additional award or recovery of creditor A’s $3,000. C017, C020.

Other failure branches

• If A received only an installment, the model’s premise that $600 was previously lawfully earned fails.
• A material-violation claim without cancellation notice does not supply a separately stated seven-day start date.
• The provider may not switch B to a different allocation method to manufacture a fee.
• No consumer application-fee deduction has been established.

Model 3 — First Chapter 13-07 payment: two calculations, no approved range

Inputs: initial payment $400; proposed origination fee $50; percentage 15%. Assume no lower contractual cap solely to isolate the ambiguity. Federal timing, if applicable, remains an additional condition.

Net-base interpretation

Plain text

$400.00 − $50.00 = $350.00
$350.00 × 0.15 = $52.50
Total retained: $50.00 + $52.50 = $102.50
Creditor distribution: $350.00 − $52.50 = $297.50

Gross-base interpretation

Plain text

$400.00 × 0.15 = $60.00
Total retained: $50.00 + $60.00 = $110.00
Creditor distribution: $400.00 − $50.00 − $60.00 = $290.00

Legal result: neither branch has been officially selected by recovered authority. These are not endpoints of an authorized $102.50–$110 range. C021–C025.

Smaller initial-payment branch: $100

Plain text

Net:   ($100 − $50) × 15% = $7.50
       Retained $57.50; creditor amount $42.50.

Gross: $100 × 15% = $15.00
       Retained $65.00; creditor amount $35.00.

The same legal hold remains.

Different transaction—not the same $400 input

If the consumer separately pays$50 origination and deposits$400 for distribution, total consumer cash is$450:

Plain text

$400 × 15% = $60
Total retained = $50 + $60 = $110
Creditor distribution = $340
$110 + $340 = $450

That does not resolve the original gross/net question, and the separate$50 receipt still falls within the trust-receipt analysis.

Residual-fee failure branch

A disclosed full-performance total of$600 minus$350 previously retained equals$250 arithmetically. It does not prove that$250 is earned, accelerated, or collectible outside deposits after cancellation. With no qualifying distribution deposit, the15%-of-deposit calculation itself has a zero base; it does not create a different fee entitlement.

Model 4 — Chapter 13-07 cancellation with prior fees and pending funds

Hypothetical terms and transactions

• Disclosed total fee cap: $200, inclusive of origination.
• Actual earning/refund clauses: not supplied.
• Separately paid origination: $50.
• Later distribution deposit: $1,000.
• Previously retained from that deposit: $150.
• Paid to creditors: $850.
• Additional pending trust money: $200.

Plain text

Total consumer receipts: $50 + $1,000 + $200 = $1,250
Prior retained fees:     $50 + $150 =           $200
Creditor payments:                              $850
Pending money:                                  $200
Check: $200 + $850 + $200 =                    $1,250

No automatic additional percentage fee

Plain text

15% × $200 pending deposit = $30
Remaining contractual capacity:
max($200 cap − $200 already retained, $0) = $0

Even before deciding refundability, this model supplies no contractual capacity for an additional$30. The provider cannot turn the balance into a$170 refund merely by applying15% again.

Conditional refund branches—not a legally approved range

• If the prior$200 is established as lawfully earned and nonrefundable, and the pending$200 is uncommitted and returnable to the debtor, the identified return is $200.
• If a legal/contractual determination also makes the$50 origination unearned, the arithmetic becomes $250.
• If the$150 service retention is instead established as unearned, the arithmetic becomes $350.
• If both components must be returned, it becomes $400.

None of those earning/refund determinations follows merely from withdrawal of the money. C032–C035.

The$850 already paid to creditors is not still in the provider’s trust balance. Any attempt to undo that benefit through rescission or another remedy requires separate legal predicates and facts; it is not automatically added to the ordinary pending-funds calculation.

No universal seven-,30-, or45-day cancellation-refund deadline is established for this model. Contract timing, §9-07-22, and—only if applicable—trust-termination law require the missing facts identified above. C029–C038.

F. Every-subquestion coverage and remaining-evidence table

G. Researcher self-check

What was freshly read: The complete two-page Chapter13-07; selected controlling Chapter13-11 definitions and interacting contract, cancellation, fee, practice, and invalidity clauses; the identified contract, rescission, statutory-construction, trust-scope, trust-distribution, and AG-restoration provisions; complete relevant TSR earning/allocation/account conditions; selected original1993 and2011 enactments; generic agency instructions and indices; and the identified majority-opinion passages.

PDF verification: Relevant operative pages were inspected visually as well as through extracted text. The AG cumulative-index cover produced an express parsed-text/rendered-image version conflict, which remains recorded rather than silently resolved.

What was not established: A responsive formal interpretation resolving any of the four ambiguities; a complete later-law or citator search; actual contract/account/fee-earning facts; professional or federal coverage; any provider’s authorization; or a guaranteed refund, award, or lawful deduction.

Fresh versus reused: P01’s supplied reviewed propositions and provenance defined this pass’s boundaries. Fresh conclusions rely on the sources registered here. The previous official Heitkamp route failure, NMLS-body gap, historical2013 effective-date issue, and January/September2026 session-law and full later-law/citator holds were not relabeled as newly completed work.

Register counts: 28 source/route entries:23 returned readable substantive, index, or discovery content;5 failed routes. Discovery materials and indices are not counted as substantive interpretations. There are 46 claim entries, 36 coverage entries, 2 published-case comparisons, and 4 principal worked models with additional failure branches.

This is researcher self-checking, not independent review. No local writes, hashes, provider approval, publication readiness, or new UI model/tier verification is claimed.

Final component disposition: The state texts and conditional legal avenues are now more precisely separated, but the installment, application-fee, gross/net/residual-fee, and Chapter13-07 transaction-specific refund questions remain subject to the exact holds identified above. No state-parent or A066 acceptance follows.

END S_ND PASS-02.