Interest Charge limit

[chita]

Thanks For Repsonding Interest Fee Charges

What is the name of your state?What is the name of your state? California
THANKS TO ALL WHO RESPONDED WITH THE ADVICE. I DID SEND A CERTIFIED LETTER AND GOT AN IMMEDIATE RESPONSE FROM THE COLLECTION AGENCY AND THEY WILL COMPLY TO MY AGREEMENT AND TERMS AND WAIVE THE INTEREST FEES. YEA!!!!!!!!!!!I'M A HAPPY CAMPER

Can a collection agency charge me as much interest on a past do bill? Is there a limit that the state allows? Are they suppose to tell me how much interest they are going to charge me? About 1 yr ago I was in a accident, I was the passenger to make a long story short I had to go to the hospital in an ambulance well later I find out the car insureance holder did not have medical insurance and at that time I had no medical insuance either so 3 months later I get a bill from the ambulance for $950.00 and they want me to pay in full. I call them up and tell them to charge the ins co. at the end the demand for me to pay in full I can not so the bill goes to collection aganecy I call the collection agency and tell them I can not pay in full can I make payment I was in financial hardship they agreed to $50.00 monthly I requested them to waive penalties and interst so I can pay them off quicker they said they have to charge in interest I said why they said state law. I request them to tell me how much interest they never told me mean while 6 months later I've been paying as agreed but I keep on noticing the interst charge so high on a $700.00 they are charging me $128.00 which brings me back to almost $900. IS THAT LEGAL? WHAT CAN I DO?

 

[dcatz]

In California, pre and post-judgment interest is 10% absent a written agreement between the parties for a different rate.

 

[Ladynred]

Can a collection agency charge me as much interest on a past do bill?

Yes.

Is there a limit that the state allows?

For something like this, yes, there most likely is a limit. Call the state attorney general's office an find out what it is.

Are they suppose to tell me how much interest they are going to charge me?

In this situation its probably somewhere in the provider's service agreement.

If you want answers, stop talking on the phone. WRITE a letter and tell them you want a complete accounting, including the interest rate, on the accout, what's been paid, etc.

 

[dcatz]

I only want to add to Ladynred's remarks and to save you the phone call.

The information that you want is in sections 3287 and 3289 of the California Civil Code, and you can read that here:
http://www.leginfo.ca.gov/calaw.html

Interest is calculated on the principal from date of breach or default and is calculated on the new principal balance from, on and after any payment or credit.

The interest rate that the agency can charge is controlled by state law, but state law does not mandate that they charge any interest.

You should be able to calculate interest accrual for yourself, knowing the dates and amounts that you paid. If your final figure is materially different from theirs, you should demand an accounting. But also recognize that agencies today use software that does that automatically and with great precision when they log your payment in, so check your math well.

 

[chita]

Interest Fee charges

I want to THANK all of those who replied to my questions. I did send a certified letter to the collection agency and they responded immediately. I was surprised a rep called me tries to tell me that they have to charge me interest after I told her that I had spoken to the manager and requested for the interest fees to be waived due to my financial situation then she changed her tune they were charging me 12%. I offered then to payoff the balance in 4 payment and that would be without the interest She said they'll more likely waive the interest fee and Send a signed agreement of my terms I requested. I was very satisfied wit there response. THANK YOU ALL FOR YOUR ADVICE.