I recently read that trade creditors may not be able to collect interest on past due balances even if the dispute ends up in Court and even if the Credit Application as well as the vendor's invoices and monthly statements make reference to interest accruing on unpaid balances at 'the highest rate allowed by applicable law. Does this sound right?

Answer: : Does it sound right? No, it sounds unfair! It is not illegal to collect interest or late charges, but without a separate agreement signed by the debtor, the creditor's ability to collect may be in question. The key is to avoiding problems is to ask customers to sign a separate agreement prepared by your attorney agreeing to may interest on late payments.