2020 Colorado Revised Statutes
Title 5 - Consumer Credit Code
Article 19. Debt-Management Services
Section 5-19-222. Trust account.

(a) All money paid to a provider by or on behalf of an individual pursuant to a plan for distribution to creditors is held in trust. Within two business days after receipt, the provider shall deposit the money in a trust account established for the benefit of individuals to whom the provider is furnishing debt-management services.

2. Money held in trust by a provider is not property of the provider or its designee. Themoney is not available to creditors of the provider or designee, except an individual from whom or on whose behalf the provider received money, to the extent that the money has not been disbursed to creditors of the individual.

3. A provider shall:

1. Maintain separate records of account for each individual to whom the provider isfurnishing debt-management services;

2. Disburse money paid by or on behalf of the individual to creditors of the individualas disclosed in the agreement; except that:

1. The provider may delay payment to the extent that a payment by the individual isnot final; and

2. If a plan provides for regular periodic payments to creditors, the disbursement shallcomply with the due dates established by each creditor; and

(3) Promptly correct any payments that are not made or that are misdirected as a result of an error by the provider or other person in control of the trust account and reimburse the individual for any costs or fees imposed by a creditor as a result of the failure to pay or misdirection.

4. A provider may not commingle money in a trust account established for the benefitof individuals to whom the provider is furnishing debt-management services with money of other persons.

5. A trust account shall at all times have a cash balance equal to the sum of the balancesof each individual's account.

6. If a provider has established a trust account pursuant to subsection (a) of this section,the provider shall reconcile the trust account at least once a month. The reconciliation shall compare the cash balance in the trust account with the sum of the balances in each individual's account. If the provider or its designee has more than one trust account, each trust account shall be individually reconciled.

7. If a provider discovers, or has a reasonable suspicion of, embezzlement or otherunlawful appropriation of money held in trust, the provider immediately shall notify the administrator by a method approved by the administrator. Unless the administrator by rule provides otherwise, within five days thereafter, the provider shall give notice to the administrator describing the remedial action taken or to be taken.

8. If an individual terminates an agreement or it becomes reasonably apparent to a provider that a plan has failed, the provider shall promptly refund to the individual all money paid by or on behalf of the individual that has not been paid to creditors, less fees that are payable to the provider under section 5-19-223.

9. Before relocating a trust account from one bank to another, a provider shall informthe administrator of the name, business address, and telephone number of the new bank. As soon as practicable, the provider shall inform the administrator of the account number of the trust account at the new bank.

Source: L. 2017: Entire article added with relocations, (HB 17-1238), ch. 260, p. 1157, § 4, effective August 9.

Editor's note: This section is similar to former § 12-14.5-222 as it existed prior to 2017. 5-19-223. Fees and other charges. (a) A provider may not impose directly or indirectly a fee or other charge on an individual or receive money from or on behalf of an individual for debt-management services except as permitted by this section.

2. A provider may not impose charges or receive payment for debt-management services until the provider and the individual have signed an agreement that complies with sections 5-19-219 and 5-19-228.

3. If an individual assents to an agreement, a provider may not impose a fee or othercharge for educational or counseling services, or the like, except as otherwise provided in this subsection (c) and section 5-19-228 (d). The administrator may authorize a provider to charge a fee based on the nature and extent of the educational or counseling services furnished by the provider.

4. The following rules apply:

1. If an individual assents to a plan that contemplates that creditors will reduce financecharges or fees for late payment, default, or delinquency, the provider may charge:

1. A fee not exceeding fifty dollars for consultation, obtaining a credit report, and setting up an account; and

2. A monthly service fee, not to exceed ten dollars times the number of creditors remaining in a plan at the time the fee is assessed, but not more than fifty dollars in any month.

2. If an individual assents to a plan that contemplates that creditors or debt collectorswill settle debts for less than the principal amount of the debt:

(A) A provider may not request or receive payment of any fee or consideration until and unless:

1. The provider has settled the terms of at least one debt pursuant to a settlement agreement or other valid contractual agreement executed by the individual;

2. The individual has made at least one payment pursuant to that settlement agreementor other valid contractual agreement between the individual and the creditor or debt collector; and

3. The fee or consideration either: Bears the same proportional relationship to the totalfee for settling the terms of the entire debt balance as the individual debt amount bears to the entire debt amount, in which case the individual debt amount and the entire debt amount are those owed at the time the debt was enrolled in the service; or is a percentage of the amount saved as a result of the settlement. The percentage charged cannot change from one individual debt to another. The amount saved is the difference between the amount owed at the time the debt was enrolled in the plan and the amount actually paid to satisfy the debt.

(B) Notwithstanding subsection (d)(2)(A) of this section, no individual who completes all of his or her obligations under the agreement may be charged fees such that those fees, when added to the aggregate of offers of settlement obtained by the provider for the debtor, exceeds the principal amount of the debt.

3. A provider may not impose or receive fees under both subsection (d)(1) and (d)(2) ofthis section.

4. Except as otherwise provided in section 5-19-228 (d), if an individual does not assentto an agreement, a provider may receive for educational and counseling services it provides to the individual a fee not exceeding one hundred dollars or, with the approval of the administrator, a larger fee. The administrator may approve a fee larger than one hundred dollars if the nature and extent of the educational and counseling services warrant the larger fee.

5. If, before the expiration of ninety days after the completion or termination of educational or counseling services, an individual assents to an agreement, the provider shall refund to the individual any fee paid pursuant to subsection (d)(4) of this section.

6. If a payment to a provider by an individual under this part 2 is dishonored, a providermay impose a reasonable charge on the individual, not to exceed the lesser of twenty-five dollars and the amount permitted by law other than this part 2.

Source: L. 2017: Entire article added with relocations, (HB 17-1238), ch. 260, p. 1158, § 4, effective August 9.

Editor's note: This section is similar to former § 12-14.5-223 as it existed prior to 2017.