What is considered a reasonable collection fee?

In Washington, a reasonable collection fee is generally considered to be 10% of the debt or a flat fee of $30.00, whichever is less. Collection fees are the fees that a creditor, such as a bank or debt collection agency, charge to a debtor when attempting to collect on a debt. Generally, collection fees are considered to be reasonable when they are proportionate to the time and effort it takes to collect a debt. Washington’s Collection Defense Law states that collection fees are limited to the lesser of 10% or $30.00. Collection fees are often used as an incentive to encourage someone to pay a debt. When creditors know that they can impose a collection fee, it makes them more likely to be willing to work with debtors to ensure that debtors pay their debt. Collection fees also help to cover the costs associated with debt collection, such as postage, telephone calls, and other expenses related to collecting debt. It is important to note that creditors cannot impose unreasonable collection fees. If a creditor attempts to charge more than 10% of the debt or a flat fee of $30.00, the debtor may be able to pursue a legal claim against the creditor for charging an excessive collection fee. It is also important to note that creditors cannot collect on a debt that has been discharged in a bankruptcy. Collection fees cannot be collected on discharged debts.

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What is considered a reasonable collection fee?

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