Debt collector/law office collecting 13% interest

[Wk4u2nv]

Im in Michigan and in November of 2016 I voluntarily surrendered my car. Just too many problems with the car and creditor. May of 2017 I was served with papers, worked the the lawyer representing the creditor with a payment plan. On the court papers it says the statutory rate of 13% from May 19th 2017 to July 12th 2017. I'm still being charged 13% interest. So as of May 2017 the total judgment was $9,410.55, first payment was made June 2017 at $300 a month. As of this date I owe $8,102. Can the law office/debt collector still charge 13% interest? Any help or advice would be greatly appreciated.

 

[justalayman]

What was the interest rate on your contract?

If it was equal to or exceeded 13% then yes they can collect the interest until the judgment is paid.

 

[Wk4u2nv]

Initial interest rate was 14.5. I can understand a 13% APR, but it seems like I'm being charged more.

 

[justalayman]

Initial interest rate was 14.5. I can understand a 13% APR, but it seems like I'm being charged more.

Well, do the calculations. There are many loan schedule calculators available on the Internet.

 

[latigo]

Im in Michigan and in November of 2016 I voluntarily surrendered my car. Just too many problems with the car and creditor. May of 2017 I was served with papers, worked the the lawyer representing the creditor with a payment plan. On the court papers it says the statutory rate of 13% from May 19th 2017 to July 12th 2017. I'm still being charged 13% interest. So as of May 2017 the total judgment was $9,410.55, first payment was made June 2017 at $300 a month. As of this date I owe $8,102. Can the law office/debt collector still charge 13% interest? Any help or advice would be greatly appreciated.

Yes, interest will continue to accrue at the rate of 13% per annum to the date of the satisfaction of the judgment. Why?

Because when sued upon a written contract specifying an annual interest rate (your car loan) interest will accrue on the judgment at the rate provided by the written contract (car loan) or at 13% per annum, whichever is the lesser figure. See: MLC 600.6013(7)

Comment: This is another typical piece of "bankers' legislation" designed to avoid Michigan's lesser judgment rate which applies when the judgment is not based upon a written instrument calling for a specified rate or interest. Here it saves your judgment creditor and costs you approximate nine points per year.