Collecting Interest on a Commercial Debt

22 Mar

Can You Collect Interest on A Commercial Debt?

Contract, Commercial Debt Collection, C2C ResourcesCollecting interest on a commercial debt can be tough to accomplish. It’s doable. It’s just tough.

Some creditors not only want to collect interest, but they also want to recover the cost accrued from using a commercial debt collection agency. Our best advice: put this demand in writing and have it signed by the buyer before an account goes bad.

Having this agreement in writing and signed increases your chances of success no matter what the legalities in your state. However, you can’t force payment anywhere but in court. In fact, some states will not even allow collection agencies to pursue interest or collection charges even it is in writing. Legal documents are enforced by means of legal action, period. But that doesn’t mean that a signed document is useless if you choose not to take legal action!

A signed agreement can become a tool for negotiation. You and your collector may agree to cut your customer a deal: Pay the principal and we’ll waive the interest charges. For the customer that really wants to keep doing business with you, it’s a pretty good deal.

If you do take legal action and you do get a favorable judgment, you can expect at the least, post-judgment interest be paid. Maybe more if the sun is shining extra bright that day.

The take away is: If you expect late payers to pay interest, say so up front in writing and get the document signed at the beginning of your business relationship.


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