No one is perfect when it comes to their finances. So, if you’ve ever fallen behind on a credit card or loan payment, you know that added fees and increased interest rates can add hundreds of dollars to the balance. And those are just the fees attached by the creditor. If an unpaid debt is handed over to a debt collection agency, the additional debt collector fees, charges, and even court costs can make you feel as if you’ll never catch up.
However, in recent years the Ohio Supreme Court has weighed in on the practice of charging interest after charge-off and found that if the debtor can demonstrate interest was waived by the original creditor, then the interest is waived as to a debt collector or debt buyer as well. The Court further ruled that it is incumbent upon the creditor to demonstrate it is charging the correct interest rate which is only the rate or rates agreed to through a written contract.
As experienced Ohio debt defense lawyers, at Luftman, Heck, & Associates, we know what debt collectors in Ohio can legally add to your balance. We also want you to be aware of all your options. In many situations, we may be able to help you reduce debt collector fees, so you can free up the necessary resources to actually make progress in removing the burden of debt.
Penalty Interest Rates
In Ohio, debt collectors can collect under the original terms of your loan. That means they may collect the default interest rates charged per your original credit agreement. Most creditors charge a default interest rate after the debtor misses or makes one late payment. The default interest rate is usually charged throughout the remaining life of the loan.
When a debt buyer acquires a credit account, this interest continues to accrue, and it is collectible since it was part of the agreement you made with the credit or loan company. However, if this was not part of your original contract, debt collection agencies cannot continue to charge interest. Also, the original creditor may have waived its right to charge interest, and if this is the case, any subsequent debt buyer has also waived its right to charge interest.
As with the default interest rate, if you agreed to pay late fees in your contract with the credit agency, debt collectors can continue to charge them. These fees, which are often a direct correlation to the account balance, can range from $10 per month to more than $35 per month. Again, creditors should stop charging these fees when the creditor charges off the account.
Whether it’s the APR or late fees, always make sure the charges are accurate. Debt collection agencies are known to puff-up or inflate what is owed. Unfortunately, many creditors in default merely pay what is presented to them because they don’t know how to fight them.
A debt defense lawyer can help you sort out which debt collector fees are valid and which are not. At Luftman, Heck, & Associates, we have helped hundreds of clients pay what’s legally owed—and nothing more.
Convenience fees are often charged for making a payment to the debt collector over the phone. The theory behind this is that the collection agency assumes more risk when it processes a payment compared to when the debit card is not present or a check-by-phone. Though there is usually a caveat involved—the debt collection agency must disclose this fact to you before your making the payment.
Attorney Fees and Court Costs
If your loan is written off or becomes so delinquent the creditor feels that taking you to court is the only remedy, the amount you’ll owe can be hundreds, even thousands of dollars more than the original debt.
In your original agreement, there is likely a clause that states you accept responsibility for all court costs and attorney fees. Ohio courts charge for virtually everything—not only for filing a lawsuit but for wage garnishment, bank attachments and post-judgment actions like motions to correct judgments and garnishment releases.
Attorney fees are not the same as court costs. These are additional fees charged and paid to the attorneys representing the debt collection agency, so they recoup the cost associated with pursuing the debt. Fortunately, in Ohio, a creditor is normally unable to recoup attorney fees in many instances. This does not stop a creditor from attempting such, so it’s important to review each case carefully.
If Debt Collectors are Calling You, Contact an Ohio Debtor Defense Attorney
No one intends to default on a loan. The debt collector fees attached can be overwhelming, and the endless calls from debt collectors can be counterproductive if you don’t have the resources to pay off the debt in the proposed time frame. What makes matters worse is that when people are behind on their payments, they often think they cannot afford an attorney. But it is essential to keep in mind that by having someone on your side who knows the Ohio credit protection laws, you can save money in the end.
The debt defense lawyers at Luftman, Heck, & Associates can help you work through the collection process and even work with collectors on your behalf. Contact us today at (888) 726-3181 or email us at firstname.lastname@example.org for a free initial conversation.