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MDLaw, Attorney
Category: Business Law
Satisfied Customers: 6133
Experience:  Experience in business law, contract law and related matters.
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We run a Heating and Air company in Georgia. Of course we

Customer Question

We run a Heating and Air company in Georgia. Of course we have some customers that don't pay their balances on time. We do not have a spelled out interest rate on the contract they currently sign. What is the most amount of interest we can charge these customers....Also, if we spell out an interest rate on a contract that they sign, how much can we charge in the future and what law governs this?
Submitted: 4 years ago.
Category: Business Law
Expert:  MDLaw replied 4 years ago.
Hello and thank you for using the Just Answer website. I look forward to assisting you.

If you do not have a spelled out interest rate on the contract, then you cannot charge them interest. You cannot make unilateral changes to a contract after it is signed.

With respect to how much interest you can charge in subsequent contract, your limit is set by Georgia's usury laws which state that anything more than 5% is considered criminal usury.

Please let me know if you need ay additional information. Thanks!

Customer: replied 4 years ago.

I don't understand. Everything I read online for state of Georgia says our Usery law is 7% not 5%.

Expert:  MDLaw replied 4 years ago.
Not sure where you are getting that 7 percent from. If you show me a link, I can explain to you why you may be misreading or misinterpreting. Here is the text of the GA statute:

O.C.G.A. 7-4-18 (2010)
7-4-18. Criminal penalty for excessive interest

(a) Any person, company, or corporation who shall reserve, charge, or take for any loan or advance of money, or forbearance to enforce the collection of any sum of money, any rate of interest greater than 5 percent per month, either directly or indirectly, by way of commission for advances, discount, exchange, or the purchase of salary or wages; by notarial or other fees; or by any contract, contrivance, or device whatsoever shall be guilty of a misdemeanor; provided, however, that regularly licensed pawnbrokers, as defined in Code Section 44-12-130, are limited in the amount of interest they may charge only by the limitations set forth in Code Section 44-12-131.