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I am a cpa in Nj. I am buying an acct receivable. 1. Pay me…

I am a cpa in...
I am a cpa in Nj. I am buying an acct receivable.1. Pay me the balance now. Or2 a. A $50 a month rebilling fee
b. What is the maximum interest rate I can charge? 2% a month? That was approved in a trial and I got what I wanted.======I assume another state like TN can charhe a higher rate. What is the maximum TN rate ? I “ believe “ 10% monthly is legal.
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12/4/2017
Law Educator, Esq.
Category: Business Law
Satisfied Customers: 121,763
Experience: All corporate law, including non-profits and charitable fraternal organizations.
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Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only. Please feel free to ignore any phone service request, the expert does not send those unless asked by customer and they are sent by the site automatically.

Under NJ law, if you are in NJ, the criminal usury limitations (N.J.S.A. 2C:21-19) apply to all loans subject to State of New Jersey law. The maximum permissible rate is 50% for corporations and 30% for non-corporate borrowers.

NJ civil usury rates are governed by N.J.S.A. 31:1-1 et. Seq. (Title 31 - Interest and Usury). Those loans that fall into the category of N.J.S.A. 31:1-1(b) are determined the Department of Banking & Insurance according to the formula set forth therein. However, it should be noted that federal law preempts State usury law (see Depository Institution Deregulation and Monetary Control Act "DIDAMCA" - 12 U.S.C. 3803). As a result, financial institutions may make loans at any rate of interest up to the criminal usury limits, and other lenders, such as mortgage companies who are funded by federal programs, also are not subject to the New Jersey caps.

So you charging 2% a month, which is 24% per annum is valid as it is under the usury rates.

So if you are entering into a new agreement with these people, the maximum rates under the NJ Usury law would be the annual rates stated above, which are quite high and generally for a normal unpaid bill, 18%-24% is the reasonable and customary interest rate.

TN, the law is 10% maximum and it is per annum not monthly, see: https://law.justia.com/codes/tennessee/2010/title-47/chapter-14/part-1/47-14-103

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Customer reply replied 2 months ago
Last fine tuning.If “i” as an individual buy the at then 2% a month is ok. I understand I get interest on interest.If “ my corporation” buys the a/r it can charge 4 percent per month?Game plan:1. My corporation buys it, charges 4% a month.2. Maybe 2 years later the ar ( initial balance + accrued interest ) is sold to “ me” as a person.2 then I drop the rate but can file in court for the balance due about a month later.No need to hire attorney as I represent myself pro se ( I am not representing my corporation as it bought it, racked up the amount due , then sold it to me an a/r.

Thank you for your reply.

Yes, you would be able to charge the interest on the loan at 2%, the court approved that 2% you said. Just because your corporation owns the loan does not mean you can charge up to 50% a year, that is for commercial type loans. If it is a commercial type loan, then you could charge 4% a month whether your company owned the loan or you owned the loan.

The higher the interest you charge, the more chance you have of the court saying it is unreasonable, remember that.

Please do not forget to leave positive feedback by clicking on the 5 stars at the top of your page, as the experts are not employees of the site and get no credit for spending time with customers unless they leave positive feedback. Thank you.

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Customer reply replied 2 months ago
The original ar was from a plumbing supply business to another business or person involved in plumbing. That makes it commercial ?It keeps that basis ( commercial)?So 4% is ok?Just a bit confused.

Thank you for your reply.

So if it was a commercial type loan, not personal, you can under the NJ law charge up to 4% a month.

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Customer reply replied 2 months ago
It wasnt a “ loan “ as we think.The plumbing supply house sold plumbing parts to a guy/ his company.The fact that a business was involved “ “extending the buyer the credit ( no payment required upon delivery) makes it commercial ?
Customer reply replied 2 months ago
That should wrap it up.

Thank you for your reply.

Right, so it is a credit transaction to a commercial business from a commercial business, so you can get away with the 4% a month and be reasonable.

Law Educator, Esq.
Category: Business Law
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Experience: All corporate law, including non-profits and charitable fraternal organizations.
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Customer reply replied 2 months ago
Thank you. I’ll carry that forward.

Thank you for your reply.

I wish you the best.

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