If you default on a debt like a loan or a credit card bill, your debt will
eventually be sold to a collection agency. While the initial debt would
have been owed to a bank or a credit card company, debt buyers will commonly
purchase these debts at a steep discount from the original creditor. After
the debt is purchased, the debt buyer has the right to collect the debt
just like the original creditor would.
While the debt buyer may be able to pursue you for a delinquent loan or
bill, can the debt buyer add to what you owe? Is it legal for a debt collector
to add fees, interests, or other costs to your account?
Like most other legal questions, the answer is “it depends.”
Legally, a debt collector may only add fees, interest, or other charges
if they are authorized by law or were anticipated in the initial contract
that authorized the debt. For instance, if a debt buyer purchases an old
credit card debt, the debt buyer can only add interest or fees if the
original credit card agreement allows it, or if it is allowed under Florida
or federal law.
Most states have laws which regulate the amount of interest that debt buyers
can charge. Unfortunately for Floridians, Florida is one of only nine
states that do not regulate the maximum interest rates or charges that
debt buyers can apply to an old debt.
Because some debt buyers are allowed to add interest and fees into the
account, many people who owe old debts may find that what they owe the
debt collector is much more than the original amount. If you are being
pursued by a debt collector, it is important to request a verification
of the amount you owe, pursuant to the Fair Debt Collection Practices Act.
After you receive a verification of the debt from the debt buyer, obtain
a copy of your credit report. The report will tell you the amount of the
charged off debt in comparison to the amount that the debt collector says
that you owe. If the numbers are very different, you should speak with
an experienced debt defense attorney about ways to reduce the amount of
Almost every debt collector will agree to negotiate the debt and accept
a lower amount than what the company says you owe. If you can’t
negotiate the debt yourself, an attorney may be able to help. At Loan
Lawyers, our debt defense lawyers can review your debt collector’s
claims and make sure that they are not artificially inflated. We can defend
you in any debt collection lawsuit, and will help you create a plan to
manage your financial obligations.
If you are being pursued by debt collectors, don’t wait to get help.
Schedule your free, confidential consultation at Loan Lawyers today by
calling (888) FIGHT-13 (344-4813).