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Expert: Michael Brotherton - 5/4/2008


Question
We own a small business and we got in trouble with one of our supplier.  I am making amends by paying $100. per week, the bill is for $4,000.  This invoice that I am paying dates back to Feb. 2007.  They started charging interest in July of "07" approx. 6% interest.  The past few months I noticed that the finance charge has been up and down, sometimes 6% to as high as 25%.  We are located in Connecticut and our supplier is located in New York.  I have two questions, 1.- Could they just start charging interest anytime they want to?  2.- Is there a cap to the percentage that can be charged?  
Thank you so much, I appreciate any help that you can give me.    Sheryl

Answer
In the absence of a contract they can only charge what your state law allows for that type of debt. They cannot just arbitrarily change rates but can make changes with sufficient notification to you of any changes prior to making those changes. One thing though, many state usury or interest rate laws effect only consumer debt and may not relate to business debt. They may charge late fees and interest but cannot just add collection fees or other charges.

All that said there is a myriad of laws pertaining to various types of debt, most relating to consumer debt, not business debt. With this being the case you may have to research the subject more fully to determine the maximums they can charge. This is not a cut and dry subject and it requires more research than I have time to invest.

I hope this helps.

Mike

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Michael Brotherton

Expertise

Consumer/Debtor Rights Advocate. Mike Brotherton is a negotiator with over 30 years experience in consumer lending and collections. Mike has 30 years in the credit and collections industry as a former loan officer, debt collector and manager of two finance companies over several years. Mike is well versed in Loss Mitigation practices and the legal collection process. He has helped literally thousands of people over many years overcome serious financial problems such as foreclosure, creditor lawsuits and abuse by debt collectors. For more information about resolving your "financial emergency" visit www.financialemergency.com. FinancialEmergency.com is a consumer web site which actively promotes Fair Debt Collection Practices and other consumer protection laws. We teach DEBTOR RIGHTS and enforcement of those rights. The more informed you are of your rights and the credit collections practices of creditors the more peace you can have dealing with your FINANCIAL EMERGENCY. Most financial problems are fairly common and as such have some very common solutions. The key is understanding your rights in the collection process and how to enforce them if need be. Primary business- Debtor Rights Advocacy and Debt Mitigation relating to foreclosure, creditor lawsuits, and other serious financial problems. www.financialemergency.com (copy and paste in browser).

Experience

Over 40 years combined experience negotiating disputes and resolving financial issues related to consumer debt, corporate issues and mortgage modifications.

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