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     | Saturday, December 18, 1999 - 10:40 am  If a collection agency buys a charged off account, can they add interest/various charges to the debt? Thanks! joe
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| | Monday, December 20, 1999 - 08:41 am Yes they can. Each state has its own rules and regulations on what the collection agency can charge. Contact the state attorney general to see what the limits are in the state where collection agency does business.
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| | Monday, December 20, 1999 - 04:31 pm I agree, IF the original contract allowed interest, and of course it did. It seems reasonable to assume that when one creditor buys a charged off account, they are simply purchasing that original creditor's contract rights against you. You are just an account receivable and the rights to that A/R have been assigned. Why would the new creditor have any more or any less rights than the original creditor? It would seem that the new creditor would have whatever rights that the original creditor had (under the original contract) to charge interest. State law would come into affect to limit usurious rates.
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| | Monday, December 20, 1999 - 06:27 pm Interesting... the Collection agency reported the past due amount as $3768 as recently as 2/99. They also reported activity on the account in 96... although it was written off on 2/93 at $3766. When I raised a fuss over the innacucurate activity reported in 96, they updated, with a balance of $8572. Seems like quite a jump for 10 mon
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| | Monday, December 20, 1999 - 08:10 pm If it was charged off in 2/93 then the statute of limitations is past and it comes off your credit report in 3/2000. Most likely the collection agency is playing funky with the numbers to increase their tax write-off and they'll charge it off themselves shortly after 3/2000.
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| | Tuesday, December 21, 1999 - 05:20 am According to most state laws, and irregardless of the original interest rates, collection agencies can charge interest up to the state limits.
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| | Tuesday, December 21, 1999 - 06:37 am Kristy, that can't be. The most basic, fundamental requirement of a contract is that there be a meeting of the minds. That both parties understand the terms and conditions of the agreement. That is why signatures are required. That is also why a 17 year old cannot contract. As a matter of law, they are not considered competent to contract. They cannot understand the terms and conditions of what they signed, so those terms and conditions are not binding. A contract provision allowing a creditor to charge interest is only one of many terms in that contract. If it was agreed that there would be no interest, then that would arguably have been one of the material factors which induced the other party into signing the contract. Contracts are bilateral, not unilateral. What you seem to state so conclusively is that whenever a party assigns its rights under a contract to someone else, the purchaser of those rights can change them however they want to, as long as they do not break the law. Consider the ramifications if that ever became the law. Can I purchase a creditor's rights against one of the people posting on this forum, and immediately decide that a new contract term shall be (for example) that I am granted a security interest in the consumer's car and power of attorney to sell it. Those terms are legal contract terms. In fact they are boilerplate in car notes (just another contract). But only if the consumer agreed to the terms. I just returned from a legal seminar (the speakers were chief judges, judges and law professors) where one of the speakers stated that they did not recognize the enforceability of the envelope-stuffers (the additional terms to the credit card contracts that are included occasionally in the envelopes with the credit card statements). Even at that level, they cannot ignore the fundamental requirement of a meeting of the minds. I am not going to do as so many people on this forum do. I am not going to call you names, etc. But what you say makes no sense to me. While contract law is not my primary focus, I deal with it often enough. And the legal speakers validated the memories that I have from classes way back when. I have seen horrible legal decisions before, but they are outliers. But you seem to be referring to a uniform law, one that is accepted in many or all states.
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| | Tuesday, December 21, 1999 - 07:08 am Well, I'm not convinced that she's not right. Here's a simple example from my life. I own various non-owner occupied condominiums and that homeowner's associations regularly change property management companies. Recently I got a letter from one of the new property management companies saying that if my dues weren't in by the 15th, I'd get a 10% late fee. The dues are $207 that makes the anticipated late fee $20.70. HOWEVER, the Covenants, Conditions and Restrictions (CC&R's) of the association specifically and explicitly cap late fees at $15.00 and interest charged on past due assessments at 7 percent. So I wrote this new management company telling them that the CC&R's prohibited what they were doing and that I'd hate to think I'd have to sue them to get them to comply with the rules of our association. They responded to me that state law permitted them to charge 10 percent late fees and that state law overrode what was in my CC&R's. They said any lawsuit would be dismissed at frivolous. I'd love to prove 'em wrong. I live in the state of California. If you have any ideas, let me know.
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| | Tuesday, December 21, 1999 - 03:44 pm Sean, what you need to do is get the statute they are quoting and read it for yourself. Usually a statute will allow up to and including a certain percentage. This is to stop usury. It doesn't usually mean that a valid contract such as the covenants are void. You may have a case against the management company. They must abide by the terms of the covenants which is basically a contract unless the statute they are quoting expressly states the covenants can be overridden.
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| | Tuesday, December 21, 1999 - 04:02 pm voigtkampff - From my experiences, I've seen original creditors tack on interest, but never a collection agency. Only those who own the debt, not those collecting, can add the interest. Again, that's my experiences. Kristy Welsh - there's no such word as irregardless - it's just plain old regardless. :)
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| | Tuesday, December 21, 1999 - 04:03 pm Guess I didn't read the original post - Joe Conte said "If a collection agency buys a charged off account ...". In that case, they own the debt, so yes.
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| | Tuesday, December 21, 1999 - 06:15 pm Sean, Cheryl is correct. You have seen from my posts that I walk the fence and rarely take a solid position. I know enough to know that I don't know much. But this is first year law student stuff. Basic contract law. Can you imagine if it did not matter what a contract said, and people could unilaterally modify the contracts? What would be the point of the contract. People spend a lot of money writing bullet-proof contracts. A lot. If a material provision is breached, the non-breaching party sues. The law TRIES to make sense. Cynic, libertarian, or not, you know this to be true. You seem to be very analytical. So could you imagine the anarchy that would result if residential lease agreements, car notes, mortgage notes, loan agreements, etc. could be modified by either party at will? Yes a contract can be modified. But there has to be consideration, and then you may end up with a whole new contract called a novation. I can imagine an argument for modification without need for new consideration. If there was a meeting of the minds inthe original contract, and they BOTH agreed that the creditor could change the agreement. But how would that change occur? With all contracts there must be offer and acceptance. The offer could theoretically come by a notice of changed contract terms. How could a consumer indicate acceptance of the new contract terms of higher interest? By continuing to use the card, I imagine. In the example given above, the consumer did not do so. The collection agency made no new offer of contract terms. And if they did, the new offer was never accepted because that account is no longer in use. Though in your case, you are continuing to make use of the association. But I STRONGLY doubt that such language would be enforced for association fees. For public policy reasons it would be struck down. Besides, those restrictions are the bible. The final word. By definition, they restrict subsequent changes. The federal constitution is our bible and final word. Imagine Florida passes a state statute that says that there is no freedom of speech. It is a law. But restrictions prohibit it. Unconstitutional. Attorneys are always looking for clever ways to warp established legal principals. But the principals I discuss here are so fundamental that I doubt that they can be manipulated in the manner proposed. I suggested one manner of doing so, but I doubt it would be enforced. Your association knows that you would not sue. For every one that does sue, there are a 1,000 who did not, who paid the extra money. It does not matter that you have clear rights. If you don't know about your rights, they do not exist. Please call SEVERAL attorneys in your area and let me know what they say.
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| | Wednesday, December 22, 1999 - 07:11 am irregardless is NOT a WORD!
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| | Wednesday, December 22, 1999 - 08:12 am Well, I can't just "stop using" the association. It's not like a credit card where you can just stop using it. Anyways I will write a letter today asking for the specific statute that they claim authorizes them to disregard the CC&R's.
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| | Wednesday, December 22, 1999 - 09:06 am I ain't trying to be no wise acre or nothing, but I found that word. http://www.m-w.com/cgi-bin/dictionary?book=Dictionary&va=irregardless http://www.onelook.com/ Webster is good enough for me. voightkampff: The hierarchy of the laws seems complicated. If the national law is that the speed limit is 55, can't a state make it is 50 if they want? The Fair Credit Reporting Act refers to "Relation to State laws" as if it has to be correlated specifically lest there be some confusion. http://www.ftc.gov/os/statutes/fcra.htm The case of an innocent consumer seeking an answer turns into a mysterious, far-reaching unanswered question. Stay tuned for the exciting conclusion in the thread "Credit: Scoring system."
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| | Wednesday, December 22, 1999 - 09:13 am Webster's is no longer an authority on the language. They have stated that Webster's will now include ANYTHING commonly in use in the language, no longer striving to be a definitive guide to what the language IS, only how it is (mis)used. Ain't, Normalcy, Nigger and Irregardless are still NOT words. I don't care who prints them.
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| | Wednesday, December 22, 1999 - 09:47 am Ouch. You take things seriously, Mr. William Scott Lockwood III. What is your reference lexicon?
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| | Wednesday, December 22, 1999 - 10:27 am Greg Fisher: On the page you referenced, it states: "Use regardless instead". Good enough for me. :)
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| | Friday, December 24, 1999 - 06:52 am To Greg Fisher, I really don't know. Not my field, but I seem to recall that Federal law will trump state law, unless the federal law had some enabling language which ALLOWS the state to modify CERTAIN provisions of the federal law. 2 quick interesting (maybe) examples. You reference the Fair Credit Reporting Act. That allows a consumer to submit a statement to be included in credit reports, right? I think that in Maine, the length of that consumer report is different from other states. Bankruptcy is clearly federal law. It sets forth exemptions, what property is protected. But it also states that any state may "opt out" of the federal exemption scheme. So in Florida, we use completely different exemptions, which is why Florida is well known for its homestead exemption and people actually move here to file bankruptcy.
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| | Thursday, January 06, 2000 - 05:15 pm Hey, just wanted to say that I enjoyed the discussion of my terrible grammer. It was most entertaining.
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