If you are working to collect on a debt that the original creditor charged off, you may wonder if you can add on interest charges. This is a common question in the collection industry in Ohio. The original creditor, according to the American Bar Association, can continue to charge interest even though most do not. Your rights as the collection agency, though, are not as clear.

What you need to do to figure out your rights to collect interest is to take a look at the original credit agreement. It can also help to see why the original creditor is not charging interest.

Creditor not charging interest

Creditors usually decide not to charge interest on a charged off account because they would have to send the debtor regular statements. This is the law to keep the debtor informed about charges to the account. In some cases, creditors stop interest charges because it is just their business standard to not do so.

The agreement

The original credit agreement will make your decision easy. It should include information about whether you can charge interest or not. In some cases, even if it does not specify that you cannot charge interest there is wording that says once the creditor charges off or transfers the account to collections, charging interest is no longer possible. So, checking out that original agreement is probably the best way to know what you can and cannot do.

State law

You also need to check Ohio law. You may not be able to collect interest on certain accounts due to credit laws in the state.

Whether you can charge interest on a collection account may not be clear. You have to look into accounts on a case-by-case basis to make sure you are within your legal rights.