Legal Question in Credit and Debt Law in Kentucky
Turning the account over to a collection agency
I would like to find out if I send over an account to a collection agency & the account had late charges occured during the time that they had our equipment. Can we also add the late charges to the grand total of the debt?
1 Answer from Attorneys
Re: Turning the account over to a collection agency
Late charges may be looked upon as a penalty, or at best, late charges, may be considered as in lieu of interest. You would otherwise be entitled to interest as well. You should characterize these charges as service charges or liquidated damages. Service charges are compensation for the cost of bookeeping the continuous account on your books. Liquidated damages are an attempt to come to an agreement with the other party on the amount of damages, in a matter in which it would be difficult or impossible to actually calculate your damages. Yes the additional charges can be part of your collection demand.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
