Can a Collection Agency Charge Interest on a Debt?

Chloe Meltzer

October 28, 2021

Debt collectors ^

Summary: Is a collection agency coming after you for a past due balance? Think they're adding charges they shouldn't? Find out if it's okay for a collection agency to charge interest on your debt.

If you are suffering from financial troubles and are unable to pay your debt, eventually a debt collector may end up calling you. This might be from your original creditor, but typically it will be a collection agency that has purchased your debt on behalf of a creditor.

If a debt collector is attempting to collect on a debt that you owe, then you might notice the amount you previously owed had gone up. This may be because of added interest. This is legal, but a collection agency is only allowed to charge interest on a debt that you owe according to what is the original creditor agreement.

This means that if any fee or interest was not authorized by the original agreement or by law, it is not allowed. In some states, there is a state law that might allow the interest to be charged and costs to be added. This is why it is essential to look at your original credit agreement. In some cases, state law may limit the amount of interest charged.

Use SoloSuit to make a defense against debt collectors and win your case.

Your rights as a consumer

As a consumer with debt, you need to know that you have rights. There are a few reasons why you might feel stressed about debt, whether it is contentious, you believe it does not belong to you, or if it is extremely high. This can be stressful, but if you know your rights, then you will be able to handle your debt a bit more easily.

For example, although a debt collector does have a right to collect on a debt that they owe, they still need to abide by the Fair Debt Collection Practices Act (FDCPA). These are laws that govern how debt collectors are allowed to operate, act, and speak to you.

You can use the statute of limitations

One thing that debt collectors do not want you to know is that your debt is subject to the statute of limitations. This is a law that specifies how long you can be sued for debt and brought to court. Each state has its own time frame, which is typically around four to six years. It is also important to know that if you make a payment on the account, it will start this period over again. If you get a call regarding an old debt, be sure to check the statute of limitations in your state.

You are not responsible for zombie debts

Collection accounts are often resold more than once. This means that you might receive a call from a debt collector that is outside of the statute of limitations or one that you do not even owe. This is illegal if you no longer owe a debt, but they still might attempt to get you to pay. Be sure to get all the details before admitting you owed a debt, otherwise it might restart the time frame on that debt.

Pick the right affirmative defense with SoloSuit.

You can ask for proof of the debt

The FDCPA requires a debt collector to send a statement that explains all the specifics of the debt, within five days of contacting you. This is important because this will help you determine if you owe the debt. You can also always ask for the debt collector to prove that you do owe the debt. If you do request more information about your debt, you can ask for information such as the amount of money you owe, the name of the original creditor, and what actions you should take if you want to contest the debt.

You can ask a debt collector to stop calling you

According to the FDCPA, a debt collector must stop contacting you if you request that they do so. This is typically done in the form of a letter. Although you will still need to pay for your debt if you owe it, it can stop the constant phone calls. If a debt collector is constantly calling you, it might already violate the FDCPA. Under these laws, the debt collector cannot call too many times per day, and only between the hours of 8 am and 9 pm. Otherwise, they are directly violating your rights.

If you are looking to avoid your debt going to collections in the first place, you need to make sure that you do not fall behind on your payments. Despite this, if you do, be sure to keep an eye on your mail, and anything you receive from debt collectors. They are allowed to require you to pay interest, but only what is allowed by law, and in your original contract.

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James


Get Started


>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit: A Student Solution To Give Utah Debtors A Fighting Chance

How to answer a summons for debt collection in your state

Here's a list of guides for other states.

All 50 states.

Guides on how to beat every debt collector

Being sued by a different debt collector? We're making guides on how to beat each one.

Win against credit card companies

Is your credit card company suing you? Learn how you can beat each one.

Going to Court for Credit Card Debt — Key Tips

How to Negotiate Credit Card Debts

How to Settle a Credit Card Debt Lawsuit — Ultimate Guide

Get answers to these FAQs

Need more info on statutes of limitations? Read our 50-state guide.

Why do debt collectors block their phone numbers?

How long do debt collectors take to respond to debt validation letters?

What are the biggest debt collector companies in the US?

Is Zombie Debt Still a Problem in 2019?

SoloSuit FAQ

If a car is repossessed, do I still owe the debt?

Is Portfolio Recovery Associates Legit?

Is There a Judgment Against Me Without my Knowledge?

Should I File Bankruptcy Before or After a Judgment?

What is a default judgment?— What do I do?

Summoned to Court for Medical Bills — What Do I Do?

What Happens If Someone Sues You and You Have No Money?

What Happens If You Never Answer Debt Collectors?

What Happens When a Debt Is Sold to a Collection Agency

What is a Stipulated Judgment?

What is the Deadline for a Defendant's Answer to Avoid a Default Judgment?

Can a Judgement Creditor Take my Car?

Can I Settle a Debt After Being Served?

Can I Stop Wage Garnishment?

Can You Appeal a Default Judgement?

Do I Need a Debt Collection Defense Attorney?

Do I Need a Payday Loans Lawyer?

Do student loans go away after 7 years? — Student Loan Debt Guide

Am I Responsible for My Spouse's Medical Debt?

Should I Marry Someone With Debt?

Can a Debt Collector Leave a Voicemail?

How Does Debt Assignment Work?

What Happens If a Defendant Does Not Pay a Judgment?

How Does Debt Assignment Work?

Can You Serve Someone with a Collections Lawsuit at Their Work?

What Is a Warrant in Debt?

How Many Times Can a Judgment be Renewed in Oklahoma?

Can an Eviction Be Reversed?

Does Debt Consolidation Have Risks?

What Happens If You Avoid Getting Served Court Papers?

Does Student Debt Die With You?

Can Debt Collectors Call You at Work in Texas?

How Much Do You Have to Be in Debt to File for Chapter 7?

What Is the Statute of Limitations on Debt in Washington?

How Long Does a Judgment Last?

Can Private Disability Payments Be Garnished?

Can Debt Collectors Call From Local Numbers?

Does the Fair Credit Reporting Act Work in Florida?

The Truth: Should You Never Pay a Debt Collection Agency?

Should You Communicate with a Debt Collector in Writing or by Telephone?

Do I Need a Debt Negotiator?

What Happens After a Motion for Default Is Filed?

Can a Process Server Leave a Summons Taped to My Door?

Learn More With These Additional Resources:

Need help managing your finances? Check out these resources.

How to Make a Debt Validation Letter - The Ultimate Guide

How to Make a Motion to Compel Arbitration Without an Attorney

How to Stop Wage Garnishment — Everything You Need to Know

How to File an FDCPA Complaint Against Your Debt Collector (Ultimate Guide)

Defending Yourself in Court Against a Debt Collector

Tips on you can to file an FDCPA lawsuit against a debt collection agency

Advice on how to answer a summons for debt collection.

Effective strategies for how to get back on track after a debt lawsuit

New Hampshire Statute of Limitations on Debt

Sample Cease and Desist Letter Against Debt Collectors

The Ultimate Guide to Responding to a Debt Collection Lawsuit in Utah

West Virginia Statute of Limitations on Debt

What debt collectors cannot do — FDCPA explained

Defending Yourself in Court Against Debt Collector

How to Liquidate Debt

Arkansas Statute of Limitations on Debt

You're Drowning in Debt — Here's How to Swim

Help! I'm Being Sued by My Debt Collector

How to Make a Motion to Vacate Judgment

How to Answer Summons for Debt Collection in Vermont

North Dakota Statute of Limitations on Debt

ClearPoint Debt Management Review

Indiana Statute of Limitations on Debt

Oregon Eviction Laws - What They Say

CuraDebt Debt Settlement Review

How to Write a Re-Aging Debt Letter

How to Appear in Court by Phone

How to Use the Doctrine of Unclean Hands

Debt Consolidation in Eugene, Oregon

Summoned to Court for Medical Bills? What to Do Next

How to Make a Debt Settlement Agreement

Received a 3-Day Eviction Notice? Here's What to Do

How to Answer a Lawsuit for Debt Collection

Tips for Leaving the Country With Unpaid Credit Card Debt

Kansas Statute of Limitations on Debt Collection

How to File in Small Claims Court in Iowa

How to File a Civil Answer in Kings County Supreme Court

Roseland Associates Debt Consolidation Review

How to Stop a Garnishment

Debt Eraser Review

Do Debt Collectors Ever Give Up?

Can They Garnish Your Wages for Credit Card Debt?

How Often Do Credit Card Companies Sue for Non-Payment?

How Long Does a Judgement Last?

​​How Long Before a Creditor Can Garnish Wages?

How to Beat a Bill Collector in Court