What penalties or interest can creditors charge when settling debt?

In Virginia, creditors may charge penalties and interest when settling debt. The penalty and interest rate depends on the creditor, the type of debt, and any applicable laws and regulations. Generally, creditors may charge late payment fees, collection costs, attorney fees, and court costs. In addition, creditors can charge accrued interest on past due balances, which may be up to the legal maximum. However, creditors may not charge fees and interest that are considered usurious or unconscionable. Usury is when a creditor charges too much interest or fees on a loan, and is illegal in Virginia. Unconscionability is when the fees and interest are unfair, and Virginia has specific regulations relating to this. In addition, debt settlement companies and attorneys may not charge more than the amount of debt settled, plus the costs of such services. Such costs may include legal fees, filing fees, and other expenses. In addition, under Virginia law, debt settlement companies and attorneys may not require consumers to pay upfront fees, which can include consulting or negotiation fees. Overall, when settling debt in Virginia, creditors can charge penalty and interest fees, but such fees must not be usurious or unfair. Debt settlement companies and attorneys may not charge more than the amount of debt settled, plus costs for their services. In addition, consumers may not be asked to pay upfront fees for such services.

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What penalties or interest can creditors charge when settling debt?

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