Can a collection agency charge interest on medical and/or utility bills?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Can a collection agency charge interest on medical and/or utility bills?
I have been researching this for a while and can’t get a clear answer. Some sites have said they can in all situations, some have said they can if the original medical or utility bill allows for interest accrual, and some have said they can charge unless the bill specifically says they can’t. The account was assigned to a collection agency and is not a judgment. As far as I can tell so far both my medical and utility bills did not have a provision for interest accrual, only “late fees”.
Asked on April 21, 2011 under Bankruptcy Law, Oregon
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Pre-judgment interest, or interest before there is a lawsuit and court judgment against the debtor, can only be charged if there was something in the paperwork or agreement enabling the assessment of interest. (Though note: it may be enough if the invoice or bill stated that if not paid, there would be interest.) Basically, prior to a court judgment, what can be charged is what the sales, service, etc. agreement says can be charged, including potentially interest, late fees, and collection or legal osts.
Post-judgment, or after a winning lawsuit, the laws allow for the winning plaintiff to recover interest (called post-judgment interest) if the damages awarded in the judgment are not paid in a timely fashion. So if there's been a judgment already, a creditor or its collections agency can recover interest even if there nothing to that effect in the agreement.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.