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CA Interest Charges?


kylecov04
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From what date can a collection agency start charging the interest they add to collection balances. Oregon Law states 9% acceptable. Collection Agency states 9% per annum, simple interest, from the date the charges were incurred. Incurred by the Collection Agency or incurred by the visit to the doctor's office?

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From what date can a collection agency start charging the interest they add to collection balances. Oregon Law states 9% acceptable. Collection Agency states 9% per annum, simple interest, from the date the charges were incurred. Incurred by the Collection Agency or incurred by the visit to the doctor's office?

Are you sure it's the collection agency adding the interest?

I suspect it's the creditor (in this case, the doctor) who is actually "adding" the interest on the unpaid...the rate of which and date from should be dictated by either your stat's laws and/or any agreement you signed at some point.

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CA is adding the interest, they state 9% simple interest, per annum (allowed by state). OC sent amount over that do not bear any interest charges added to them. Thanks for your response. I've posted a couple other threads regarding other areas that this CA is in violation of, I think. I'm currently researching to prepare for small claims as I've been sued within 30 days of original contact from the CA.

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Why are you bumping someone else's thread???

Maybe because they want to see the answer? :)

In any case, collection agencies can only add interest if they are assigned the debt. Your state has rules on how much interest can be charged if the interest rates on a default have not been specifically spelled out on a contract.

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Maybe because they want to see the answer? :)

In any case, collection agencies can only add interest if they are assigned the debt. Your state has rules on how much interest can be charged if the interest rates on a default have not been specifically spelled out on a contract.

Cute. :)

Should a distinction be drawn between interest "added by a CA" as opposed to an account continuing to accrue interest from the original creditor?

While it would not always be applicable, would not some debts will accrue interest whether a CA has been assigned the account or not in which case a consumer may see his "balance" growing every time the CA contacts him...in other words, just because a CA may reflect that interest has been added to a debt does not automatically mean that it's the CA himself "adding" the interest.

Not sure if I"m being clear here or not. :)

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No - it's not being added by the OC, it really is being added by the CA. "...interest shall accrue at such a rate by the bank or its assignees".

However, I don't care whether it's a CA or JDB. If you are settling with these guys, I always settle based on the defaulted amount anyways. you are settleing for way less, why split hairs.

In addition...Trust the CAs to add interest per the contract? What contract? They don't have it, trust me.

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No - it's not being added by the OC, it really is being added by the CA. "...interest shall accrue at such a rate by the bank or its assignees".

However, I don't care whether it's a CA or JDB. If you are settling with these guys, I always settle based on the defaulted amount anyways. you are settleing for way less, why split hairs.

In addition...Trust the CAs to add interest per the contract? What contract? They don't have it, trust me.

Point taken but if I remember correctly, there wouldn't be a "contract" in the normal sense of the term in this case as I believe the OP's issues are all regarding medical debts.

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Point taken but if I remember correctly, there wouldn't be a "contract" in the normal sense of the term in this case as I believe the OP's issues are all regarding medical debts.

Hey, right again (twice in one day!), medical collection agencies usually have records.

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They are medical bills and the OC did not add a penny of interest to my account. CA is adding the interest. It showed an interest amount separate from the OC balance on the first letter I received from CA. And it does change on the statements they sent to me as "validation".

Their amounts don't add up when applying the states allowed 9% per annum, simple interest. I'm assuming that they can only charge from the date they were assigned the account to collect. Here's an example:

Principal . . . 282.00 . . . interest . . . 29.13

Principal . . . 120.00 . . . interest . . . 5.80

Dates of service were three days apart. One Dr. to admit my 4 year old son to the hospital and one to discharge him. So it doesn't make sense that the amounts are incurred from date of service. Nor does it make sense that the amounts are from date of assign if it is truly 9% interest with no extra charges added in.

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Why are you bumping someone else's thread???

There can be no "one" answer to that question...it depends on the instrument that created the obligation and what state laws apply (and what they say).

Robert,

It had been 3 days with no replies, and I was curious about the answer(s).

Admin,

Thanks for understanding. I only get to sign on about once a day.

Back to the matter at hand, that CA isn't even remotely consistent.

So, in kyle's case probably not something to sue over, right? It's only a TILA violation if they report it to the CRA(s).

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Does anyone think it is fair to assume that CA can't charge interest before they are assigned a debt by OC? Wouldn't their charges start on that day? The date of assignment?

I suggest that instead of asking for or making assumptions or worrying about what is fair or isn't fair, find out what your state law allows...if the CA is adding interest in violation of stat law then take appropriate action; if they aren't then it's a moot issue.

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I suggest that instead of asking for or making assumptions or worrying about what is fair or isn't fair, find out what your state law allows...if the CA is adding interest in violation of stat law then take appropriate action; if they aren't then it's a moot issue.

Robert,

I've done that, and I've posted what the state law is, and what is legally allowed... State Law allows 9% per annum. CA says 9%, simple interest, per annum. But the fact that no one seems to be able to answer is WHEN can the CA start charging the interest on principal. That is my question. I have already researched and found what you suggest I do.

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Robert,

I've done that, and I've posted what the state law is, and what is legally allowed... State Law allows 9% per annum. CA says 9%, simple interest, per annum. But the fact that no one seems to be able to answer is WHEN can the CA start charging the interest on principal. That is my question. I have already researched and found what you suggest I do.

I'm sure there have been cases in your state you can research where this question has been raised but if you can't find it in your state's statutes or in case law from your state's courts then I'd advise you to consult with an attorney in your area.

I see it as a minor point at most...who is "charging" the interest is immaterial...interest is owed because the debt exists.

If you think the amount of interest being claimed is incorrect then present your calculation to the court...the court will decide who is right.

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ORS 82.010 Legal rate of interest; effect of violation. (1) The rate of interest for the following transactions, if the parties have not otherwise agreed to a rate of interest, is nine percent per annum and is payable on:

(a) All moneys after they become due

Seems to me that answers your question.

The above tells me it's 9% per year and interest starts being charged the day after the debt/bill/obligation became due and wasn't paid. Since there is no specific permission for the interest to be compounded and since, where it is mentioned at all, the statute specifically says simple interest; the reasonable position is that this is simple interest - 9% per year.

As I read this, whether it's the creditor or the CA is completely immaterial...if you owe $100 at midnight on January 1 and you pay the debt off on December 31 of that same year, you'll owe $100 plus 9% or $109. After two years you would owe $118.

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Seems to me that answers your question.

The above tells me it's 9% per year and interest starts being charged the day after the debt/bill/obligation became due and wasn't paid. Since there is no specific permission for the interest to be compounded and since, where it is mentioned at all, the statute specifically says simple interest; the reasonable position is that this is simple interest - 9% per year.

As I read this, whether it's the creditor or the CA is completely immaterial...if you owe $100 at midnight on January 1 and you pay the debt off on December 31 of that same year, you'll owe $100 plus 9% or $109. After two years you would owe $118.

It seems to be a question to which there is no answer. That would be my assumption of the calculation of simple interest as well. The CA forgot or chose not to use that method. I've tried all types of methods on he spreadsheet I built for the separate billings. Working with a day to day calculation that compounds, day to day simple interest addition... and nothing adds up right. If simple is the answer then they are up to a rate of 27% or more. It's a small thing, but wrong on the 5 billings they are suing me for. And the two billings they are collecting from a friend of mine.

I am back to digging up cases. I don't want to walk in to court and not know what I am talking about. That's why I am hoping there is an answer somewhere in writing that I can use to back up my calculations. State law did not include anything useful for that question other than the rate. If a CA is adding the interest then it seems fair to assume that they cannot charge it prior to the date they were assigned the account. OC didn't ever charge a penny of interest and their amount are for balance only, no interest. Date of assignment seems to be the date they become due. Or perhaps CA can go back to the date the first missed payment was not made and the account became in default. They can't go back to the date of last payment because account was not in default, 30 days later it would have been.

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It seems to be a question to which there is no answer.

I suspect it's more truthful to say that you've been shown the answer but you don't don't like it because the statutes don't say precisely what you want them to say.

Your statutes seem pretty clear to me - it says 9% per year...were the interest allowed to be compounded it would have said so...it didn't...it said "per year". The statutes also say the interest can be charged the moment the obligation becomes delinquent...seems pretty straightforward.

Hopefully you'll find some case law on point.

You said these are medical bills, yes? Medical bills are due when the medical service is rendered and they become "delinquent" when you walk out of the office/emergency room/whatever without paying.

Take your calculations to the court...it will be up to the court to decide who is right; you'll present your calculations, the creditor/CA will show/explain theirs; the judge will decide who is right (presuming he/she cares).

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I suspect it's more truthful to say that you've been shown the answer but you don't don't like it because the statutes don't say precisely what you want them to say.

Your statutes seem pretty clear to me - it says 9% per year...were the interest allowed to be compounded it would have said so...it didn't...it said "per year". The statutes also say the interest can be charged the moment the obligation becomes delinquent...seems pretty straightforward.

Hopefully you'll find some case law on point.

You said these are medical bills, yes? Medical bills are due when the medical service is rendered and they become "delinquent" when you walk out of the office/emergency room/whatever without paying.

Take your calculations to the court...it will be up to the court to decide who is right; you'll present your calculations, the creditor/CA will show/explain theirs; the judge will decide who is right (presuming he/she cares).

Thank you Robert. I'll go back and try out the spreadsheet based on that information. Maybe even from the date last payment I made to OC, then from the original dates of service. I'll let you know if the numbers balance.

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