Can I collect interest on a debt?

In Texas, the ability to collect interest on an unpaid debt varies depending on the type of debt. Generally, the Collection Defense Law allows creditors to charge interest if it is provided for in the original agreement with the debtor. If not, then the interest rate is limited to 10% per annum. In order to collect interest with the debt, the creditor must give the debtor written notification outlining the interest rate, when it begins to accrue, and how it will be charged. This way, the debtor is aware of the cost that may be added to the original debt amount if it remains unpaid. Another way that a creditor can collect interest on a debt is by court order or judgment. If a court rules in favor of the creditor, they may be able to add interest to the debt amount depending on the specifics of the ruling. It is important to note that collecting interest on a debt is not always allowed in all circumstances. In Texas, the Collection Defense Law prohibits creditors from charging interest if it is deemed to be unreasonable or oppressive. Therefore, the creditor must adhere to the law and their agreement with the debtor in order to collect interest on an unpaid debt.

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Can I collect interest on a debt?

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