What is considered a reasonable collection fee?

In Maryland, a reasonable collection fee is one that is a proportionate share of the cost of collecting a debt. This includes the effort, time, and costs incurred by the creditor in collecting a debt. These costs may include, but are not limited to, court costs, attorney’s fees, and other costs associated with the collection process. The Maryland Court of Appeals has set forth guidelines for determining the reasonableness of a collection fee. These include: the complexity of the case, the amount of time spent, the costs associated with the collection process, and the degree of difficulty in collecting the debt. In addition, the court considers whether the creditor made reasonable efforts to collect the debt, including communicating with the debtor several times and providing notice of the debt. The maximum fee that a creditor can charge for debt collection is fifteen percent of the amount of the debt. If the creditor does not provide the debtor with notice of the debt or fails to make reasonable efforts to collect the debt, then the fee may be lower than fifteen percent. In conclusion, a reasonable collection fee in Maryland is one that is a proportionate share of the cost of collecting a debt. The maximum fee that a creditor can charge is fifteen percent of the amount of the debt, but may be lower depending on the circumstances of the case.

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What is considered a reasonable collection fee?

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