Can a collection agency charge attorney's fees before the consumer's case has gone to court?

Thank you for contacting Haystack Help. In regards to your question about whether a collection agency can charge attorney's fees even when you have not gone to court. The answer is - it depends. Any fees the agency attempts to assess must be authorized by the existing or original contract or by law. If the original contract says, "person will be responsible for all collection costs," or something similar, then the collection agency may be able to charge interest, penalties, late fees, and attorney's fees. In general, most contracts provide for payment of collection costs, including attorney's fees. These are costs incurred by the collection agency even though it hasn't gone to court. Also, some collection agencies are law firms that can charge an hourly rate. Because this has not gone to court, you have a better chance of negotiating down these fees. Just make sure everything is in writing before you make a payment. 

For more information please read the "Federal Fair Debt Collections Practice Act." The information provided to you is not intended to be legal advice. Please consult with an attorney.

Written by Byron Whitehorn, Haystack Help Director