ADDING COLLECTION CHARGES...

Adding collection charges to your debtors' accounts can totally offset your collection costs. If you plan ahead, you can protect yourself against the added cost of collecting overdue debts by adding a collection charge where allowed by law.

Collection charges are normally permissible if you:

1. Specifically mention collection costs in the instrument that creates the debts. For example, print notice of charges on credit application or sales agreement.
   
   

   Example: "I / We understand and agree that any credit granted shall be paid promptly in accordance with terms and agreements, that the credit grantor may add one and one-half percent (1 1/2 %) per month to any balance owed, and in event of default to pay reasonable collection charges and/or attorney fees."

2. Post the notice of a charge at your cash register in reference to bad checks.
   
   
3. Consult your attorney. We suggest that you verify with your legal counsel your legal right to add a collection charge.