This information is general in nature and is not intended to apply to any specific situation. Please call our firm to discuss the application of the law to your facts.
As you can see, this is a tricky area and many people inadvertently charge too much. The law does permit a creditor to “cure”, or “correct” his collection procedures when he discovers his error in order to reduce or prevent the severe penalties.
If you have committed usury without realizing it, you are not alone. The laws in this area are often misunderstood. Please call us for assistance if you think you have made a usurious demand and we will be happy to consult with you and put you in touch under your LegalShield contract with an attorney who works in this area to assist you in determining if you have committed a violation and if so, how to cure the violation.
Information and documentation needed:
All of our attorneys who practice debt collection are well-versed in these requirements and are happy to explain and work with you on how to meet these requirements so that we can proceed to attempt to collect amounts that you are owed.
We will be happy to email or fax you a copy of the Collection Authorization Form for your use, or you may complete the CAL on the web page. If you prefer, you may make photocopies of a blank Collection Authorization Form to use with future collection letter requests.
Yes. We can send the collection letter by certified mail. We will charge you $15.00 for each certified mail letter you request. If you want certified mail, please send a check for the certified mail cost with your collection authorization formand the documentation of the debt. If you send everything together, it will expedite the process.
We prefer not to include a demand for interest in a collection letter. If we demand interest and the interest rate is too high for the type of transaction, it could be viewed as a usurious demand and be subject to severe penalties under the usury laws. The maximum interest rate we will demand is 6% per year.
“Usury” laws are the laws that govern the rates at which you can charge interest. Interest is compensation for the use, forbearance or detention of money, regardless of whether you call it “interest”, “service fees”, etc. The maximum rate you can legally charge without any agreement between the parties is 6% per year. You cannot charge the 6% per year until the 30th day after the debt becomes due. IF there is a written agreement signed by both parties to pay interest but the rate was not determined, the maximum amount is 10% per year. This is sometimes referred to as “legal interest”. In certain types of written transactions, a higher interest rate can be charged. The laws regulating charging a higher interest rate are complex and the penalties for violations are severe. Making a demand that is usurious is all that the law requires in order to impose the penalties. Actually collecting too much interest is not necessary for the penalties to apply.
Call us. Based on the information you provide, we will be happy to consult with you and if necessary, put you in touch under your LegalShield Plan with an attorney who works in this area to assist you in determining the rate you can charge, preparing proper documentation, and establishing collection procedures that comply with state and federal law.
Correction of a violation is possible under Texas Finance Code §349.201. The correction must occur not later than the 60th day after the date on which you actually discover the violation. The steps required to correct the violation are: 1) perform the required act (for example: eliminate the late charge or reduce it to an amount that does not exceed 6% per year), 2) refund any amount in excess of the amount authorized by law, and 3) give written notice to the customer of the violation by delivering the notice in person or by first class US. mail within 60 days from the date you discovered the violation. This can be a complicated procedure if you have made a usurious demand and we will be happy to consult with you and put you in touch under your LegalShield Plan with an attorney who works in this area to assist you in determining if you have committed a violation and if so, how to cure the violation.
Many people erroneously believe that merely filing an affidavit in the county records where the real estate is located creates a valid builder’s and mechanic’s lien. This is not the law in Texas. The law that controls builder’s and mechanic’s liens varies depending on who the parties are and the type of contract being performed. The deadlines for and types of notice required depend on whether you are the general contractor, a subcontractor, or a provider of specialty materials; whether the real estate involved is commercial, residential and/or homestead property; whether the debtor is an individual or government entity and on whether and what type of retainage is being held. Failure to meet a deadline or to give the proper written notice to all of the required parties can invalidated a lien, even though you have filed an affidavit with the county clerk. In the case of work done on homestead property, failure to sign and file certain documents before the work commences can invalidate a later lien. As you can see, this is a complicated area that requires diligent attention to deadlines and compliance. If you want assistance in this area, do not hesitate to contact us. We will be happy to consult with you and, if necessary, put you in touch under your Plan with an attorney who works in this area to assist you in establishing valid liens.
Did you know that you could end up owing money to the dead beat who hasn’t paid you if you are charging too much interest or putting inappropriate “late payment fees” on your invoice? You could even be charged with a criminal misdemeanor if you charge too much interest in certain situations (even if you do not actually receive the interest!) Please call us if you have any questions or concerns about the interest rate, late fee charges, service fee charges or any other charges that you are including in your contracts or on your invoices. We will be happy to advise you on these matters.