Interest Added To Debt

[Litti]

I have two questions regarding ownership of cc debt and interests added to it.

Situation: The debt is $1000 on DOFD and the cc issuer keeps adding high interests and fees to this amount for the following six months. After six months the debt has grown to $1500 and now the cc company discharges the debt and sells it to a CA for $250. At this point the CA demands from debtor $1500 and still keeps adding interests to this amount until payment is made.

Question 1: Is debtor still responsible for the full amount originally owed to the cc company ($1500) or is debtor now responsible for the amount that CA paid for this debt ($250)? In other words, does the new contract and its terms (debt now valued at $250) between OC and CA also apply to the debtor?

Question 2: How much interest and fees can be added to the debt after DOFD? Are there any standards / guidelines?

Appreciate all your input and advice.

[willingtocope]

The answer to both your questions is...it depends on the original terms and conditions of the original debt.

Its not unusual for an OC to continue to charge interest and penalties right up until the time they sell it to a JDB...could be years. Usually, CC contracts pass those right onto their "assigns", in other words, the people they sell it to.

Some states do have limits as to how much interest can be charged, but, most CC contracts say that they're governed by the state in which the CC company is located...like Delaware, which has liberal limits.

However, whether or not a JDB can collect on the debt depends on how much you're willing to fight it....

[IHateCAs]

1) You are responsible for full amount.

2) It depends on the contract, but they likely can continue to charge contractual rate.