I live in Indiana and I was wondering if you make regular payments is a debt collector allowed to still charge you interest? My husband is now being garnished because I didn't feel it was right that the debt collector was still charging interest every week as though he was not making payments.

Comments for interest.

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Mar 10, 2012

Your husband was not entitled to decide for himself how much he would pay each month on his outstanding debt. He was obligated to pay the debt according to the terms he agreed to when he incurred the debt.

If he could not make his legally-obligated payments, he should have contacted the creditor to try to negotiate an more affordable payment plan and then abided by the terms of the plan assuming he got one. Given that he did not do this, his creditor was within its rights to do what it did to your Otherwise, he risks having what has happened to your husband, and garnishment will be very damaging to his credit history.

As for the issue of interest, more than likely, his agreement with the creditor entitled the creditor to collect interest on any outstanding balance he might owe. If that is the case, then the collector that was working for his creditor was perfectly entitled to demand that your husband pay the interest. The only exception would be if the collector were collecting additional interest that is specifically prohibited by a law in your state or if the collector is trying to collect more interest than your state law allows. I am not an expert on IN law so if you want to clarify this issue, consult with a consumer law attorney in your area who helps people resolve their debt collection issues.

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