Minnesota Collection Agency Bond Overview
- Purpose: To hold debt collectors financially responsible for upholding state laws
- Who Needs It: Individuals, corporations and partnership debt collectors in Minnesota.
- Regulating Body: The Department of Commerce
- Bond Amount: $50,000
- Minimum Price: $300
What Is a Minnesota Collection Agency Bond?
The Minnesota Department of Commerce (DOC) requires debt collectors to have a $50,000 surety bond. Being bonded ensures that debt collectors and agencies conduct business according to Minnesota Law. This financially protects the state, clients, and debtors from fraud and malpractice.
Who Needs a Collection Agency Bond?
Individuals or businesses handling debt collection on behalf of clients need a collection agency bond. There are three separate $50,000 bond forms based on your business entity structure:
- Corporation/LLC
- Partnership
- Individual Proprietorship
Make sure you pick the right one when applying for your quote.
How Much Do Collection Agency Bonds Cost in Minnesota?
Minnesota collection agency bond premiums start at $300. These bonds are underwritten, meaning a soft credit check is required to determine your rate.
Select your business entity type below and apply for a quote today!
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does a Minnesota Collection Agency Bond Work?
By purchasing a Minnesota collection agency bond, you enter a three-party legal agreement.
| Bond Party | Description |
|---|---|
| 1. Principal | The licensed debt collector or agency owner |
| 2. Obligee | The Minnesota Department of Commerce |
| 3. Surety | The issuing surety provider |
The surety provides financial compensation to harmed parties if the principal:
- breaks contract terms,
- acts fraudulently, or
- breaks laws.
Unlike with insurance, the principal is responsible for reimbursing the surety for paid claims.
How Do I Get a Collection Agency Bond in Minnesota?
Getting your Minnesota collection agency bond is simple. To buy your bond, complete the following steps:
- Apply for a free quote online
- Receive your quote within one business day
- Pay the premium and e-sign documents
- Upload the bond form with your license application
Can I Get Bonded With Bad Credit?
SuretyBonds.com works hard to approve 99% of applicants. If you’re worried about having a lower credit score, read about our Bad Credit Bonding Options. You may still be eligible for the bond, you’ll just pay a higher premium.
How Do I Renew My Collection Agency Bond?
Minnesota collection agency bonds expire annually. You’ll need to renew your bond each year to maintain your license.
We’ll send renewal updates 90 days before the expiration date. To renew your bond, follow the instructions sent in updates and pay the renewal invoice.
How Do I Update My Bond Information?
You can often update basic information on your bond using a bond rider issued by your surety company. Just email or call our customer care team and a representative will assist you.
How to Get a Debt Collection License in Minnesota
To become a debt collector or agency owner in Minnesota, you must apply via Sircon.com. Complete the following steps to apply for your collection agency license:
- Create a Sircon account
- Buy a $50,000 surety bond
- Provide a financial statement on this form
- Submit a copy of your company organizational structure document(s)
- Register the legal name of your firm
- File a Certificate of Assumed Name with the SoS and attach supporting documents, if applicable
- Submit a copy of partnership agreement, if applicable
- Pay the $1,000 application fee and submit
- Complete a background history screening at the time of hiring*
Each branch of a collection agency must have a separate license. Use the Affiliated Company form to notify the DOC of any affiliated companies.
If you are an individual debt collector, you must apply and receive approval for a collection agency license before applying for an individual registration. The fee is $10.
*Note: The Minnesota DOC requires you to complete your background screening through a Professional Background Screening Association Vendor.
For more detailed information visit the Minnesota DOC Debt Collections page.
How Much Does it Cost to Get Licensed
You can expect to pay at least $1,300 to get your Minnesota debt collection license.
| Fee Type | Fee Amount |
|---|---|
| Application Fee | $1,000 ($500 for the license, $500 for an investigation) |
| Surety Bond | $300+ |
| Branch Location Fee (if applicable) | $500 per branch location license |
How to Renew Your Debt Collection License
Minnesota debt collection licenses expire on June 30 every year. As with the initial application, you’ll renew your license through Sircon.
Renewal applications open the first week of April and must be submitted by June 30. Follow these steps to renew your collection agency license:
- Sign in to your Sircon account
- Pay the $400 renewal fee
- Complete a renewal background screening
- Renew your $50,000 surety bond with the surety provider
Refer to the Minnesota Debt Collections page for more details on renewing your license.
