(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 2 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.

(b) Money held in trust by a provider is not property of the provider or its designee. The money 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.

(c) A provider shall:

(1) Maintain separate records of account for each individual to whom the provider is furnishing debt-management services;

(2) Disburse money paid by or on behalf of the individual to creditors of the individual as disclosed in the agreement, except that:

(A) The provider may delay payment to the extent that a payment by the individual is not final; and

(B) If a plan provides for regular periodic payments to creditors, the disbursement must comply 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.

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

(e) A trust account must at all times have a cash balance equal to the sum of the balances of each individual’s account.

(f) 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 must 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 1 trust account, each trust account must be individually reconciled.

(g) If a provider discovers, or has a reasonable suspicion of, embezzlement or other unlawful appropriation of money held in trust, the provider immediately shall notify the Attorney General by a method approved by the Attorney General. Unless the Attorney General by rule provides otherwise, within 5 days thereafter, the provider shall give notice to the Attorney General describing the remedial action taken or to be taken.

(h) 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 which has not been paid to creditors, less fees that are payable to the provider under § 2423A of this title.

(i) Before relocating a trust account from 1 bank to another, a provider shall inform the Attorney General of the name, business address, and telephone number of the new bank. As soon as practicable, the provider shall inform the Attorney General of the account number of the trust account at the new bank.

(j) A provider shall be deemed not to hold a trust account for disbursement to creditors if such client funds are either:

(1) Retained by the client in a bank of their choosing at all times prior to their disbursement to the clients’ creditors; or

(2) Deposited by the client in a bank or with a third party designated by the provider, in an account having the following characteristics:

(A) It is in the name of the client;

(B) It is not subject to claims of the creditors of any party other than the client; or

(C) The client exercises full control over all aspects of the account.

(k), (l) [Repealed.]

75 Del. Laws, c. 430, § 1; 76 Del. Laws, c. 146, § 5.