Creditors Rights Law

Can The Creditor Recover Costs Of Collection?

You cannot recover costs of collection (meaning attorney fees and contingent collection fees) from a U.S. debtor unless your sales contract specified such. At least 10 U.S. states forbid recovery of collection costs as “against public policy,” even if provided in a contract. These states are located mostly in the Midwest and include: Kansas, Kentucky, Michigan, Nebraska, North Dakota, Ohio, South Dakota and West Virginia. However, expended court costs (for filing fees, service of process, etc.) are legally recoverable in all states and are added to the amount of the final judgment.