When are late fees, etc. considered to be usurious?

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When are late fees, etc. considered to be usurious?

I purchased a vehicle in 2005. I started falling behind and was paying late around 2008. In 2010, with a year remaining, I have been scrambling. The car is supposed to be paid off in 12/10, and I have 3 payments left. In speaking with the collection folks, I thought they were doing me favor by working with me since I was almost done paying, and they acknowledged that. They would threaten repo, but I was able to come up with a payment. I asked for a payment history, and that is showing that I owe a lot more than the late fees that I agreed to pay. They are trying to get me to pay almost $50,000 for a 2000 vehicle that I bought used. I did not agree to these ursury fees.

Asked on November 11, 2010 under Bankruptcy Law, California

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 13 years ago | Contributor

I think that you need to get some help in your area with all of this. You sound like you may have agreed to various terms and conditions under duress and fear of repossession.  A usurious loan is one in which the interest rate is in excess of those permitted under the usury laws of your state. The contract that includes the excessive loan amount is then an illegal contract under the law.  It is good that you got a copy of the loan statement and the payment history.  Now sit down with someone to help you do the calculations and to figure things out. Sooner rather than later is best. Good luck.


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