CA charging interest

Welcome to the community Guest.

It depends on if any of the following apply

1. The state in which you resides permits interest to be accessed on a charged off account placed for third party collection.

2. If they have the original contract and that contract has a provision that allows the account to continue to accrue interest following charge off.

Also there is a general federal cap of (I believe) 6% that may be accessed if your state allows it. Please keep in mind that this rate applies if they either A. do not have the contract or B. if the contact does not allow for interest or it was not a contractual debt.

If you can answer the following questions I may be able to further assist you.

1. What state do you live in?
2. When was the last time you paid on the account?
3. What type of account is it?
4. What was the balance of the account when it was charged off?
5. What month/year was the account charged off in?
6. What was the interest rate at the time of charge off?
7. Do you still have a copy of the contract on file?

There is no federal cap on interest (excepting a 36% cap that applies to any loan involving military personnel).

The term "chargeoff" does not mean that interest has to stop. That is a misconception that people would like to hold true, but it is not. If a debt/contract/agreement calls for interest, then interest can be charged until the debt has been paid.

HOWEVER, some states may require a company be licensed in order to charge/collect interest. For example, in Illinois, if a CA wants to charge interest then they need to have a loan license. Without a loan license, they can only try to collect the principal balance of that debt.

You should check with your state to see if a CA needs to be licensed in order to charge interest. If so, then make sure Portfolio is licensed as a sales finance agency.

I live in GA, it was a credit card with MBNA/Bank of America, date of last payment August 2006. I don't have the original contract since it was opened 2/1999.

What about the interest rate prior to charge off and the balance prior to charge off? I would like to try to determine the interest rate being accessed by the CA.

Course the easiest way to do that would be to send a debt validation letter, let them show you how they calculated it.

I just found out today that a waste collection company had sent my debt to a third party agency. there was never a contract and I only used their service about 3 time. I cancelled my acct. It was just in Feb or March. The sent me a prorated bill for 84.00 and change. I have never paid the bill; I simply forgot because I moved from the address. I got a letter tod from a collection agency and they had added 2.00 more dollars interest. I advised them that they had no right to charge interest- only the creditor; they told me that they can charge as LOng as the acct is owed. I live in Marietta,GA- cAN THEY CONTINUE TO ADD THIS INTEREST- I advised them that I would offer my apology to the waste management company and pay the company the amount that is accually owed.please reply.

They are allowed to add 1 1/2% per month for outstanding late invoices, which is about 18% APR, unless your state directly overrides that.