Question about max limit of interest a collection company can charge

[Anonymous]

I had a debt sold to a collection comapny in 2004.  In the 14 months in which they held it, they added over $1100 interest to it.

I know that they are legally able to do that if the original terms of my contract allowed for accrued interest, but I also know that it's to a maximum which differs depending on what state you're in.  I live in Minnesota and have been digging and digging to find this, but can't make heads or tails out of all the legalese. 

Can someone please explain the max in MN to me in plain english, and how interest for a debt such as this would be computed?  I need to know if they charged me over the max allowed or not.

[Anonymous]

Sorry I can't answer about the int.allowed.

If the CA bought the debt in 2004 then your DOFD must be well before that.

Is the OC reporting? If they are what is the DOFD or the drop date reported on EX or TU?

This might be ready to be deleted from your CR.

[Anonymous]

About DOFD on this one...this is a credit card debt that was purchased.  Is the DOFD calculated from the date I was first late on the card, or from the date the debt was purchased by the collection company?

I'm trying to position myself to do an FHA loan this fall, and am debating how worthwhile it is to go after this one.  It won't fall off from my report before I mortgage shop either way, but it'd be nice to know what date I should be calculating from, and to try and get that corrected if possible.

[JoeBJay20]

DOFD is the date in which you were first 30 days late and never became current again.  It's a set in stone date from the OC that the CA has no authority over or ability to change.  But like HappyDays said, if it was bought by the CA in 2004 then chances are the DOFD is in 2002 or 2003. 

[Anonymous]

Just looked at an Experian report I had archived with the OC reporting (they aren't anymore, just the CA)...the DOFD is March 2004, which means it would be scheduled to drop in March 2011.

I'm planning a home purchase this September; is it worth fighting this one?

[nothingman02]

The CA can charge interest permitted by the original contract. The original contract would probably state that the default interest rate would be whatever it is that is being enforced by the state in which the OC is based at. The OC would probably be located in a State with the most favorable laws.

If not, the CA could still charge interest permitted by the State. Please check the thread - state resources.

If not, then you may have something there. But remember the CA could still claim any number of fines, charges, fees etc.

If none of those are permitted by the original contract or the original contract is not available, then you certainly have something (against the CA).