What is the maximum doc prep fee in an installment sales contract?

The maximum document preparation fee in an installment sales contract is defined by Michigan law, which stipulates that this fee can be either a flat amount or a percentage of the contract price, whichever is lower. According to the guidelines, the maximum allowable fee is $160 or 5% of the total price of the sale.

When determining the fee in a real installment sales scenario, it's important to ensure that the lesser amount between the flat fee and the percentage is applied, maintaining compliance with legal standards. This ensures that consumers are not overcharged and have better clarity regarding the terms of their installment contracts. Understanding these regulations is critical for collections managers to ensure they adhere to legal practices while handling installment contracts, thus avoiding potential legal issues or disputes with consumers.