Debt Collectors Charging Interest?
Posted on
June 9, 2009
at
1:15 am
can a debt collector do that? i was surprised to find a higher bill amount when one of my credit card accounts statements was sent to me. this is crazy!
Posted on
June 9, 2009
at
2:14 am
Betty Bopp~By federal law, debt collectors are prohibited from collecting any amount on top of the balance that the consumer already owes, unless this is explicitly indicated on the original agreement between the debtor and the creditor, and if state law permits. Collection charges, interest, service fees, late fees, and bad check handling fees fall under this regulation.If the contract with the creditor does state that any of the above fees may be collected, the debt collector cannot persist in doing so.
Posted on
June 9, 2009
at
2:36 am
What Karess illustrated earlier applies to debts that are judgment-free. However if a judgment, or a court-ordered lien is placed against an individual's home or property, exists on a particular debt, state rules apply. The interest charges added on these debts because of judgments are called statutory charges. The interest rate starts to kick in from the date the judgment is rendered until the judgment is paid in full.The different interest rates can be found here: http://www.fair-debt-collection.com/state-garnishment-laws.html
Posted on
June 9, 2009
at
3:37 am
Can debt collectors still charge interest even if the debt has been written off, or charged off?
Posted on
June 9, 2009
at
3:43 am
Curious George~ When an account has been written off as a bad debt, the creditor considers it as a loss or a liability of the company. The principal amount is accounted as a "write off" on the creditor's balance sheet. Now, since it's deemed as a loss, interest will no longer apply on balance. I may be wrong on this matter, so feel free to correct me on this: if a debt collector still attempts to collect on a written off account, it means that they already have full responsibility for the loan. Any amount collected from the debtor will go directly towards the collection agency, and not to the creditor. It already is considered a loss after all.
Posted on
June 9, 2009
at
4:01 am
betty bopp, you also need to first carefully review your statements and check on the original contract that you signed with your creditor. the debt collector should also provide you wth a copy of the breakdown of any fees, interest, or any other additional chagres that have been included on the principal.
Posted on
June 9, 2009
at
4:33 am
I may be wrong on this, but in reference to Curious George's question, I think if there's a debt buyer involved and they pursue legal action, they can charge interest. Sometimes they can recover legal expenses, too. Don't quote me on this though.
Posted on
June 9, 2009
at
4:58 am
Another interesting thing I'd like to touch on here: federal law sets the interest rates for overdue taxes, and defaulted student loans, while state law sets the interest rate standard for overdue child support payments. Just a heads-up in case you may also have concerns on these matters.Betty Bopp, if you need help on taking care of your unsecured debt, feel free to fill out a form on top of the thread, and DestroyDebt.com will be more than happy to connect you to a qualified provider.
Posted on
June 9, 2009
at
8:13 am
Ok, there are a lot of conflicting reports on here. In simple terms, collection agencies, even if the debt has charged off, are allowed to charge interest on the account if state laws or the original contract between the creditor and the debtor state that any collection agency who retains the debt are permitted in doing so.
Posted on
June 16, 2009
at
7:44 am
Yes that is true. Also, if the debt has charged off most states permit collection agencies from charging the default interest rate, so keep that in mind too. I know a lot of junk debt buyers ignore these laws and try and charge the default interest rate anyway so look out!
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