Can I collect interest on a debt?

Yes, you may collect interest on a debt in Maryland. Collection defense law allows creditors to collect interest, fees, and charges associated with a debt provided they are in accordance with the agreement between the creditor and the debtor. The maximum interest rate allowable for creditors to charge debtors is six (6) percent per annum, or one and one-half (1.5%) percent per month. This rate applies for any kind of debt including contracts, mortgages, and other promises to pay. The interest rate for delinquent accounts is higher. It may be calculated at a rate of five (5) percent or more per month, depending on the terms of the agreement between the creditor and the debtor. Creditors may also continue to charge interest on a debt even after the account is paid in full. In addition to interest, creditors may charge additional fees and charges within reason. These charges must be in compliance with the terms and conditions of the original agreement. Creditors should not charge excessive or more fees or charges than what was agreed upon. Under collection defense law, creditors are required to give debtors a form called “Notice of Intent,” before filing a lawsuit to collect debts. This notice informs debtors of the exact amount of the debt, including interest, fees, and charges already imposed. It is important to carefully review the Notice of Intent so that you understand any interest, fees, and charges that may be included.

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Can I collect interest on a debt?

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