Hidden Cost of Debt Collection: Interest, Fees and Costs

People facing a court judgement for debt often ask themselves “how did my bill get so big?”  The answer to this question is that your debt grew due to additional interest, debt collection fees and costs added before and after judgment has entered against you. Defaulted debt is normally comprised of the principal balance, interest, fees and costs.  Even after you stop using your credit cards and incurring debt, your balance will increase by monthly interest, often at high default rates.  The creditor will then add in the fees and costs associated with collection on your debt.  Ignoring or delaying a true resolution of your debt only increases your debt substantially and makes it that much harder to resolve.  Resolving your debt as soon as possible is the surest way to keep the problem small and manageable.

Most people confronted with collection demands or Court Judgments are shocked by the amount of their debt.  Debtors often wrongly believe that all interest, fees and other collection costs stop when they stop paying on their debt.  Unfortunately, this is far from the truth, as small debts rapidly become large, unpayable debts by the addition of interest, fees and costs.

Debt Collection Interest

Prior to a Court Judgment, your creditor will present to the court an itemization of the what you owe.  This itemization will include your balance plus pre-judgment and post-judgment interest.

  • Pre-judgment interest is the amount of interest that has accrued since the account defaulted, but prior to the Court Judgment. The Court will award pre-judgment interest at the amount agreed to in your Contract or up to 8% if there is no prior agreement.


  • Post-judgment interest is an additional amount that keeps getting added to the Judgment Debt until the judgment is satisfied. In some cases, the debt owed may be  substantially increased by the allowance of post-judgment interest. If a creditor requests post-judgment interest from the court, you may end up paying 10% interest on top of your debt until you are able to pay it off, in some cases tripling the overall amount you end up paying to the creditor.


Debt Collection Fees And Costs

In addition to pre-judgment and post-judgment interest, Debtors are required to pay for any fees and costs associated with the lawsuit brought against them.  These additional fees and costs generally include, court costs, sheriff/marshal fees and costs, and attorney fees.  The additional expenses that result from delay and inaction significantly increase the amount you are required to repay.

  • Court Costs are incurred in every lawsuit filed in Connecticut. These costs are incurred by your creditor once they file their lawsuit against you and are included in the amount of debt they collect from you.  The Connecticut Judicial Branch website has a breakdown of all court costs incurred with the commencement of a suit, motion filing, and court copies, please refer to the website for any specific court costs you are inquiring about.


  • Marshal fees and costs are additional expenses that are billed to you. These fees and costs are initially paid by your creditor and then are included in the Judgment Debt your creditor is granted.  In addition, every time a Marshal executes on a bank levy, or wage garnishment they can collect another 15% from you.  This means that even small debts can become impossible to resolve as your payments go to excessive fees and costs without ever reducing the original Judgment Debt.


  • Collection Attorney fees will be granted by the court when a judgment is entered against you.  As the Debtor, you will be required to repay all attorney fees incurred by the creditor.  These fees and costs are nearly always approved by the Judge as long as they are found to be “reasonable.”  There are no set collection attorney fees but there are industry standards for attorney collection fees and they can be very substantial, especially in relation to smaller debts.  It is not unusual to have the attorney fees owed exceed the actual debt itself! In fact, most collection lawsuits aren’t defended, so interest, fees and costs can go entirely unchallenged in Court, resulting in large, unnecessary Judgment amounts subject to enforcement by Wage Garnishment, Attachments, or Judgment Liens.


  • Most people believe that they do not have enough money to pay for an attorney to assist them in fighting a lawsuit, when in actuality you may end up paying more to the collection attorney suing you than to any consumer debt attorney that assists you in fighting the lawsuit.


Learn how to survive a collection lawsuit and prevent collection attorney fees, costs and interest fees by contacting a legal professional to defend your lawsuit.  Even after a judgment has been rendered against you it is never too late to seek professional help.


Contact the Law Office of Neil Crane today at 203-230-2233 to stop the running of interest, and avoid incurring further fees and costs. We can help you get out from under this debt!

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