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New York Debt Collector Surety Bond

Before the State of New York will permit someone to work as a debt collector, they must obtain a surety bond. This guide covers the basics.

What is a New York Debt Collector Surety Bond?

This type of surety bond, like all types, holds the bonded party (the debt collector) financially accountable if their conduct violates applicable laws and codes of conduct in New York. When that happens, the party who is wronged by the debt collector may file a claim against the New York debt collector bond seeking damages in the form of financial compensation. The surety bond guarantees payment for all valid claims and holds the bonded party financially responsible.

How does a New York Debt Collector Surety Bond work?

Here's an example: A debt collector seizes a sum of money from someone who was not actually in debt. The person who paid may file a claim against the surety bond seeking damages. The surety agency that issues the bond will then investigate the claim to verify the details are all true. Then, the surety agency will pay the claim in full. The final part of the process involves the surety agency using whatever means necessary to collect the amount of the claim (plus interest and fees) from the debt collector who caused the claim and, under the surety bond contract, agreed to pay for all claims.

Who needs a New York Debt Collector Surety Bond?

Anyone working or planning to work as a debt collector in New York will need one of these surety bonds as part of the licensure process. It's illegal to work as a debt collector without a license, and there are strict penalties for anyone who does. Effectively, that means it's illegal to work without a bond. If you plan to pursue this line of work, find a surety agency like Viking Bond Service to partner with sooner rather than later.

Why is it necessary to have a New York Debt Collector Bond?

Debt collection is a sensitive line of work, and it's important that debt collectors operate according to the strict letter of the law. Requiring people to get a New York State debt collection agency license that includes a surety bond requirement helps to police the industry by creating a strong financial incentive for debt collectors to follow all the rules.

Who are the parties involved in a New York Debt Collector Surety Bond?

The debt collector partners with two other parties in the surety bond agreement:

  • Principal - The debt collector who obtains the bond and pays for all claims.
  • Obligee- The party wronged by the debt collector who has the right to file claims.
  • Surety- The party that issues the bond and pays for claims - before collecting from the principal.

How much does one a New York Debt Collector Bond cost?

New York law requires the surety bond to be valued at $25,000, meaning the surety agency that backs the bond agrees to pay out up to $25,0000 in claims. The actual cost of the bond is just a small percentage of the total, often in the range of 5%. Every surety bond seeker pays a different amount depending on their credit score and financial history. Bad credit will mean higher costs. However, at Viking Bond Service, bad credit doesn't have to mean getting denied for a bond.

How to apply for a New York Debt Collector Surety Bond

It's a simple process: complete a standard bond application, agree to a credit check, and turn over any additional documentation the surety agency asks for. You will then receive a quote for the surety bond costs. Pay the cost (called the premium) and the bond activates, after which you receive a document proving you have the required surety bond.

Viking Bond Service - Serving All of New York

We make it fast, easy, and affordable to get a New York Debt Collector Surety Bond. Get a quote in as little as 24 hours by submitting our online bond application at your convenience. Or get more information from our team of surety bond experts: fill out the contact form on this page or call us at 1-888-278-7389.

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