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What to do re: interest

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3 years 2 months ago #2457 by JWBuilding
Hi all,

My question is about a customer / individual debt. As in working for a member of public, not a business / commercial debt.

I’ve read on a few places that when interest is added to an overdue amount and the customer makes a part payment, interest and any fees are paid off first, then the overdue amount.

Eg. Overdue amount £1000 + interest £100 = £1100
The customer pays £1000, so this pays off £100 of interest and fees and £900 of the overdue amount. This leaves £100 of the overdue amount and would continue to accrue interest.

Is this completely right and if so, would anyone know where I can find details of the law / regulation etc that stipulates this?

Thanks

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3 years 2 months ago #2462 by j.salmon@cpa.co.uk
Hi as I understand it this has always been the convention and it may be stated in some case law somewhere but I am unaware of a particular reference.

It is not addressed in the Late Payment legislation as faras I am aware.

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