Q: is it legal in florida contract law to impose a 50% penalty for a payment not made on time?
I have agreed to pay a certain amount by october 29 2022 but my creditor wants to impose a 50% penalty if the payment is even one day late. is that legal?
A:
Legitimate private creditors can impose any "late penalty" they want. They do it to make sure they get their money back from you.
BTW, if you complain to the creditor about this policy it will make it look like you are intending to be late, which is why the creditor charges a 50% late fee.
If you think this is unfair then do not borrow from them.
A: It may or may not be lawful. Your inquiry is a bit vague as to whether you have an valid agreement that has the penalty set forth therein. You said your creditor "wants" to impose the penalty. So is that penalty one of the terms you agreed to or not? If not, then he can't impose it. If you DID agree to it, the next question is whether it the kind of loan that the late fee cap of Fla. Statutes Section 687.03(2)(c) applies to. You can find that statute on-line. If it applies, there's a cap of 5% of the installment amount due, and it cannot be impose until at least 10 days late. If inapplicable, and you did agree to it, the creditor may be able to get away with it if the penalty is actually a late fee, rather than interest on the loan by another name. If the creditor happens to be a collection agency, the creditor must be registered with the Fla. Office of Financial Regulation, and if unregistered, any collection activity is unlawful.
A: Re-sending my answer to correct a couple typos: It may or may not be lawful. Your inquiry is a bit vague as to whether you have an valid agreement that has the penalty set forth therein. You said your creditor "wants" to impose the penalty. So is that penalty one of the terms you agreed to or not? If not, then the creditor can't impose it. If you DID agree to it, the next question is whether it's the kind of loan that the late fee cap of Fla. Statutes Section 687.03(2)(c) applies to. You can find that statute on-line. If it applies, there's a cap of 5% of the installment amount due, and it cannot be imposed until at least 10 days late. If inapplicable, and you did agree to it, the creditor may be able to get away with it if the penalty is actually a late fee, rather than interest on the loan by another name. If the creditor happens to be a collection agency, the creditor must be registered with the Fla. Office of Financial Regulation, and if unregistered, any collection activity is unlawful.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
