Can a Collection Agency Add Fees on Your Debt?
Collection agencies cannot add fees to your debt without a court judgment against you. Interest from your original contract is the main exception. Respond to debt lawsuits promptly to avoid default judgments that allow collectors to add collection costs and legal fees.
Answer Your LawsuitWhen a creditor sells your debt to a collection agency, that agency becomes the new owner. They gain many rights, but they must follow strict rules.
Debt collection agencies can legally add interest and fees to your balance. Your debt often grows larger than what you originally owed.
Stop Collectors From Adding Fees to Your Debt
Respond to your debt lawsuit before the deadline and prevent a default judgment. Our partner Solo guides you through filing your Answer in minutes.
Respond to Lawsuit NowFederal and state laws govern how collections work. The Fair Debt Collection Practices Act (FDCPA) is the key federal law. It regulates the fees a collection agency can charge you.
Understanding these laws protects you from unfair practices. You can fight back when collectors overstep their boundaries.
Understanding the Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act (FDCPA) is a federal law. It controls how debt collectors attempt to collect from you.
The FDCPA regulates several important areas:
- Debt collectors cannot lie or use deceptive tactics
- They may only call between 8 am and 9 pm
- You can demand they stop contacting you
- They must honor your request to stop
The FDCPA applies to third-party debt collectors. It does not cover original credit card companies directly.
Each state has additional protections too. Some states apply similar rules to original creditors as well.
Can a Collection Agency Add Fees on the Debt?
Under the FDCPA, debt collectors must follow your original contract terms. Your original agreement with the creditor still applies.
The contract terms transfer through each sale of the debt. Even after multiple owners, the original terms remain in effect.
A debt collector cannot add fees without court permission. They need a judgment placed against you first.
Understanding this protects you from illegal fee additions. You have rights that limit what collectors can charge.
How to Avoid a Judgment
Preventing fees means avoiding a judgment in the first place. You must take action when sued for a debt.
Respond to the lawsuit within the deadline shown on your summons. A proper response forces the collector to prove their case.
If you fail to respond, you automatically lose. The court issues a default judgment against you.
After a judgment, collectors can add collection costs to your debt. These include phone calls, mailings, and legal expenses. Our partner Solo helps you respond correctly and avoid default judgments.
All added fees require a court judgment first. Your response prevents this from happening.
Interest Fees May Be Added to Outstanding Debt
Interest is the main exception to fee restrictions. Your original contract specifies an interest rate clearly.
Interest rates are defined in your agreement terms. Collectors can charge interest without a judgment.
Keep copies of all your written contracts. You need proof of what fees are legally allowed.
Your documentation shows the exact interest rate agreed upon. It proves your case if disputes arise in court.
Filing a Lawsuit Against a Debt Collector
Court filing fees and service costs can be added after a judgment. Legal fees also require a judgment against you first.
Without a judgment, you have options to fight back. You can file a countersuit against the collector.
You can sue a debt collector who violates the FDCPA. You may recover damages for their violations.
Courts may award you up to $1,000 in penalties. Collectors often drop their lawsuit when you countersue.
They hope you will settle or drop your case. This gives you negotiating power.
How to Respond to a Debt Collection Lawsuit
Responding to a debt lawsuit protects your rights. You need to file an Answer with the court.
Your Answer must address each claim in the lawsuit. You must file within the deadline on your summons.
Our partner Solo makes responding simple and fast. The process guides you through every required step.
You answer questions about your case and situation. The system generates your legal Answer document automatically.
You can print and mail your Answer yourself. Or you can have it filed for you professionally.
Taking action prevents automatic judgments and additional fees. You gain time to negotiate or settle your debt.