Interest on interest

[LEP]

Rider2010, I think as stated before the interest does not
drop to 5% until it is in judgement and only from that
point forward, not back to the start of the A/R.

I have seen many of these accounts accrue interest at 2%
per month over my banking career go through all stages
of collection and legal process, not one was adjusted by a
judge. However many were negotiated down upon some
form of payment. It is simply leverage to get paid.

I have however seen way too many lawyers tell
prospective clients what they want to hear, get a retainer
and burn through a pile of client's cash defending stupid
positions.

Get a second opinion from a reputable law firm.

[charliep]

One of the issues may be that on many types of high interest payment, a borrower losses the interest free period from the time of purchase to the due date on the first payment. Example, you purchased something on October 1st and missed the payment on November 1st. Your interest starts on October 1st when you made the purchase, not November 1st when you missed the payment.

I am sometimes amazed (past life) at some farmers with high interest debt and crop inventory in the bin unsold. You have to be really bullish to pay this type of carry. At least in the new world, you can get fully paid for wheat on delivery and reduce your debt.

[charliep]

From the old days, I remember people who had interest free periods from seeding to the fall, missed their fall payment and paid the full high interest rate bill May to October. That is how a lot of zero interest rate consumer credit works with the assumption some people are stupid enough to miss payments and have the loan revert to a high rate from zero.

[Hopperbin]

Riders can you explain to me how someone would put up land to a supplier which should have been mortgaged to a bank? Something does not add up here.

[Hopperbin]

Been a long time since our credit union took ownership of land because owner was unable to make payments. Then it went to the highest bidder and the credit union would make money on it, don't think they ever lost money cause they could always sell for more than was owed. Anyways some bits of useless info.

[ColevilleH2S]

Hopper I took that statement to mean that the retailer was also in the farming/landownership game, and purchased some land out from under their customer.

That was just my take anyways.

[gustgd]

A good info graphic on high interst rates.

http://www.cracked.com/funny-4179-credit-cards/

Take away is just pay your bills.