Posts Tagged ‘collection fees on payday debt’

State Laws About Collection Charges And Repayment Plan On Payday Debt

Some payday lenders charge very high amount of collection fees on payday debt and they just keep on multiplying the fee with every passing month. But it is very important for you to keep in mind that now many states have come up with some specific laws that restrict the maximum amount of collection fee a payday lender can charge. Besides that there are also legal provisions for an affordable repayment plan in many states, as per which, if a borrower is unable to make the repayment in time, he/she must be offered an affordable repayment plan (usually in small monthly installments). The lender is also prohibited from rolling over a loan again and again, as there are certain . If you lender is violating any of these laws, you can against them with your state authority. Following is a list of all those states that have made specific regulations on whether a repayment plan should be offered to the borrower on non-repayment of the debt and how much money a lender can charge as part of collection fees.

Washington (WA)

Collection Charges: $25 NSF fee (one time per loan program)

Is A Repayment Plan Allowed? : As per the laws applicable in the state of Washington, it is the legal right of a borrower to get a statutory if he/she has taken four successive short-term cash advances, but this legal right can be exercised only before he/she makes default on the last loan also. In general, the laws allow the borrower and the lender to enter a payment plan voluntarily at any time.

Virginia (VA)

Collection Charges: Besides a maximum amount of $25 as NSF fee, the lender may also charge court costs. The attorney’s fees however must be quite reasonable and must not be more than $250 in any case.

Is A Repayment Plan Allowed? : Yes, once per year

Oklahoma (OK)

Collection Charges: NSF fee is applicable but only if it has been disclosed in the loan contract; in any case, it must not exceed $25. However, this fee may not be applicable if check gets dishonored due to theft or forgery.

Is A Repayment Plan Allowed? : Yes

Ohio (OH)

Collection Charges: $20 collection charge

Is A Repayment Plan Allowed? : Yes, 60 days, no fees

New Mexico (NM)

Collection Charges: $15 NSF fee one time per loan

Is A Repayment Plan Allowed? : Yes, the borrower must be allowed to make the repayment of the payday debt in equal installments over at least a period of 130 days

Nevada (NV)

Collection Charges: $25 dishonored check fee, but this fee must be not be charged more than one time if the check gets dishonored because of closed account and not more than two times if the check gets dishonored because of insufficient funds.

Is A Repayment Plan Allowed? : Yes

Michigan (MI)

Collection Charges: One $25 returned check charge

Is A Repayment Plan Allowed? : Yes

Indiana (IN)

Collection Charges: One $20 NSF fee. If debit authorization or check was used to defraud another, additional charges may also be applicable.

Is A Repayment Plan Allowed? : After three consecutive loans, it becomes legally mandatory for the lender to offer an extended repayment plan for the borrower. This repayment plan must be divided into at least four equal installments without any additional charges.

Illinois (IL)

Collection Charges: One $25 NSF fee (Presentment limit = 2)

Is A Repayment Plan Allowed? : Yes

Florida (FL)

Collection Charges: The lender can charge a collection fee on payday debt only in a situation when certain charges have been imposed on them from other financial institutions (such as a bank). Lender is also not entitled to treble damages.

Is A Repayment Plan Allowed? : Yes

California (CA)

Collection Charges: $15 NSF fee

Is A Repayment Plan Allowed? : Voluntary. If a repayment plan is finalized, the lender must not charge any additional fee.

Alaska (AK)

Collection Charges: $30 NSF fee. Besides that, if the lender has disclosed in the loan contract, charges for court costs may also be made up to $700 over the amount of the payment.

Is A Repayment Plan Allowed? : Yes

Alabama (AL)

Collection Charges: One $30 NSF fee. Court costs may also be applicable. The attorney’s fees must not exceed 15% of the face amount of the check

Is A Repayment Plan Allowed? : Yes

Wisconsin (WI)

Collection Charges: $15 NSF fee.
Check presentment limit: two times.

Is A Repayment Plan Allowed? : No

Tennessee (TN)

Collection Charges: One $30 NSF Fee; Court Costs

Is A Repayment Plan Allowed? : No

South Carolina (SC)

Collection Charges: NSF fee of $10 or actual charge, whichever is less

Is A Repayment Plan Allowed? : No

Oregon (OR)

Collection Charges: One $20 NSF fee plus additional bank charges

Is A Repayment Plan Allowed? : No

North Dakota (ND)

Collection Charges: $20 NSF fee, but this fee on payday debt is applicable only if the lender has disclosed a provision for this in the loan agreement.

Is A Repayment Plan Allowed? : No

Nebraska (NE)

Collection Charges: $15 NSF fee

Is A Repayment Plan Allowed? : No

Montana (MT)

Collection Charges: One $30 NSF fee; Court costs and reasonable Attorney’s fees may also be applicable if any such provisions have been made in the loan contract.

Is A Repayment Plan Allowed? : No

Missouri (MO)

Collection Charges: no specific limit on NSF fee, but the lender is strictly prohibited from using a series of ACH transactions for the collection of a single check.

Is A Repayment Plan Allowed? : No

Mississippi (MS)

Collection Charges: NSF fee and court-awarded fees can be applicable if mentioned in the loan agreement.

Is A Repayment Plan Allowed? : No

Minnesota (MN)

Collection Charges: $30 NSF fee

Is A Repayment Plan Allowed? : No

Louisiana (LA)

Collection Charges: One NSF fee of actual bank charge (if disclosed). Besides that, Reasonable attorney’s fees and court costs may also be applicable on payday debt, but only up to a maximum charge of $25 or 5% of check, whichever is greater.

Is A Repayment Plan Allowed? : No

Kentucky (KY)

Collection Charges: One NSF fee (if disclosed)

Is A Repayment Plan Allowed? : No

Kansas (KS)

Collection Charges: One NSF fee

Is A Repayment Plan Allowed? : No

Iowa (IA)

Collection Charges: One $15 NSF fee (exclusive remedy)

Is A Repayment Plan Allowed? : No

Idaho (ID)

Collection Charges: $20 NSF fee. Besides that, if loan contract says specifically about it, 12% interest per annum may also be charged on the outstanding dues.

Is A Repayment Plan Allowed? : No

Hawaii (HI)

Collection Charges: $20 NSF fee. In the state of Hawaii, check cashers are not entitled to recover damages if they accept check passed on insufficient funds

Is A Repayment Plan Allowed? : No

Colorado (CO)

Collection Charges: One $25 NSF fee. Court costs and reasonable attorney’s fees may also be applicable, but the total charges must not be more than the actual loan amount in any case.

Is A Repayment Plan Allowed? : No

Arkansas (AR)

Collection Charges: NSF fee, court costs and reasonable attorney’s fees might be charged on payday debt. There are no specific provisions on the maximum amount of fees.

Is A Repayment Plan Allowed? : No


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