stateoconfusion
Junior Member
What is the name of your state (only U.S. law)? TN
A colleague is dealing with collections efforts on a contract (for business services) in Tennessee. The contract says that payment is due upon completion of services, and that 1.5% interest on any past due balance will be added as a late charge each month. Is this enforceable? He did not have funds to pay at the time, now is willing to pay and the only dispute is over interest and costs of collection.
The closest thing I can find in TN statutes is 47-14-103, which seems to say that the maximum rate is the "formula rate" for "written contracts" and 10% for "other transactions." The "formula rate" now appears to be 7.25% (per the TN Department of Financial Institutions web site). So is the maximum interest collectible on this contract 7.25%? Or 10%? Either way that's a lot less than 1.5% per month. Or is there some other statute that would authorize higher interest?
A colleague is dealing with collections efforts on a contract (for business services) in Tennessee. The contract says that payment is due upon completion of services, and that 1.5% interest on any past due balance will be added as a late charge each month. Is this enforceable? He did not have funds to pay at the time, now is willing to pay and the only dispute is over interest and costs of collection.
The closest thing I can find in TN statutes is 47-14-103, which seems to say that the maximum rate is the "formula rate" for "written contracts" and 10% for "other transactions." The "formula rate" now appears to be 7.25% (per the TN Department of Financial Institutions web site). So is the maximum interest collectible on this contract 7.25%? Or 10%? Either way that's a lot less than 1.5% per month. Or is there some other statute that would authorize higher interest?