Comments Off on California Judge Rules That Interest Charges Must Be From Client Written Agreement

It is becoming obvious that you need to add extra fees or interest in your Contracts in order to help recover the cost of Debt Collection. In a significant ruling, the Ninth Circuit Court in California ruled that such fees can only be added to the original debt if they are part of a written agreement between the client and the debtor or are the result of a Judgment.

The resolution of the problem is extremely quick and easy. You need to include a line in your customer agreement stating that, if debt collection is required for the collection of any unpaid bills, an extra XX% charge will be added. The document MUST be signed and dated to be valid

That’s it. Problem solved. It is better to charge a Fee instead of Interest they won’t conflict with other possible added interest charges such as those imposed by a Judgment.

You have every right to expect payment for the service you render. You also have every right to have the debtor pay at least most of the cost of debt collection. All you have to do to make it happen is put it in writing and have it signed.

The results will jump right to your bottom line.…

Understanding debt collection and background screening best practices can save your business big money. Building up front applicant screening into your business processes costs you very little, but saves you so much in the end. If you haven’t already, partner with a full service debt collection and applicant screening company to guide your business to a place of security and prosperity. Contact us to sign up for a free account and get started protecting your business today.


Executive Credit Management is a full-service Debt Collection and Applicant Screening agency with over 20 years experience located in Central New Jersey. We provide excellent service in the following areas: Employment ScreeningBusiness Screening, and Tenant Screening. Executive Credit Management belongs to a number of Skip Tracing databases and offers services to help locate and confirm the current address of missing debtors. Other services provided are: litigation evaluation on all lawsuit decisions, improvement of the quality of the applicant data, Lawsuit Monitoring, Handling of Debtor Disputes. Executive Credit Management features the best Call Monitoring System in the Debt Collection industry.