T.P.I.-- CRIM. 11.16

DEBT ADJUSTING

            Any person who engages in or offers to engage in or attempts to engage in the business or practice of debt adjusting is guilty of a crime.

            For you to find the defendant guilty of this offense, the state must have proven beyond a reasonable doubt the existence of the following essential elements:¹

[Part A:

(1)  that the defendant entered into a contract with a debtor

       whereby [he] [she] [agreed to periodically distribute]

       [distributed] money among specified creditors;

and

(2)  that the defendant received a consideration for such act;

and

(3)  that the defendant acted either intentionally, knowingly, or

       recklessly.²]

or

[Part B: 

            (1)  that the defendant [acted] [offered to act] [attempted to act] as an

                   intermediary between a debtor and creditors;

and

            (2)  that the defendant acted for the purpose of [settling] [compounding]

                   [altering] the terms of     payment of a debt of a debtor;

and

            (3)  that the defendant received [money] [other property] [from the debtor]

                   [on behalf of the debtor] for the payment to, or distribution among,

                   the creditors of the debtor;

and

            (4)  that the defendant received consideration for such act;

and

(5)  that the defendant acted either intentionally, knowingly, or

       recklessly.²]

            "Debtor" means an individual, and includes two (2) or more individuals who are jointly and severally, or jointly or severally indebted to a creditor or creditors.³

            "Debt adjuster" means a person who engages in, attempts to engage in, or offers to engage in the practice or business of debt adjusting,⁴ except the following persons shall not be considered debt adjusters:

            [(1)  attorneys-at-law;]

            [(2)  banks, fiduciaries, financing and lending institutions as duly

                   authorized and admitted to transact business in this state and

                   performing credit and financial adjusting services in the regular

                   course of their principal business;]

            [(3)  title insurers and abstract companies, while doing an escrow

                   business;]

            [(4)  judicial officers or others acting pursuant to court order;]

            [(5)  nonprofit organizations rendering debt management services for fees

                   or charges not exceeding twenty dollars ($20.00) per month per

                   debtor;]

            [(6)  employers for their employees].⁵

            "Intentionally" means that a person acts intentionally with respect to the nature of the conduct or to a result of the conduct when it is the person's conscious objective or desire to engage in the conduct or cause the result.⁶

            "Knowingly" means that a person acts knowingly with respect to the conduct or to circumstances surrounding the conduct when the person is aware of the nature of the conduct or that the circumstances exist.  A person acts knowingly with respect to a result of the person's conduct when the person is aware that the conduct is reasonably certain to cause the result.⁷

            "Recklessly" means that a person acts recklessly with respect to circumstances surrounding the conduct when the person is aware of but consciously disregards a substantial and unjustifiable risk that the circumstances exist or the result will occur.  The risk must be of such a nature and degree that its disregard constitutes a gross deviation from the standard of care that an ordinary person would exercise under all the circumstances as viewed from the accused person's standpoint.⁸

FOOTNOTES

  1.  Tenn. Code Ann.  § 39-14-142.

  2.  Tenn. Code Ann.  § 39-11-301(b) and (c) and accompanying Sentencing

       Commission Comment.

  3.  Tenn. Code Ann.  § 39-14-142(a)(3).

  4.  Tenn. Code Ann.  § 39-14-142(a)(1).

  5.  Tenn. Code Ann.  § 39-14-142(e).

  6.  Tenn. Code Ann.  § 39-11-106(a)(18).

  7.  Tenn. Code Ann.  § 39-11-106(a)(20).

  8.  Tenn. Code Ann.  § 39-11-106(a)(31).

COMMENTS

            1.  Debt adjusting is a Class A misdemeanor.  Tenn. Code Ann. § 39-14-142(d).

            2.  If the definition of an offense within Title 39 does not plainly dispense with a mental element, intent, knowledge or recklessness suffices to establish the culpable mental state.  Tenn. Code Ann.  § 39-11-301(c).  The Committee is of the opinion that the definitions of "intentionally", "knowingly", and "recklessly" should all be charged for this offense.