29A.99 - MAXIMUM RATE OF INTEREST.
29A.99 MAXIMUM RATE OF INTEREST.
1. An obligation or liability bearing interest at a rate in
excess of six percent per year that is incurred by a service member
either individually or jointly with the service member's spouse
before the service member enters military service shall not bear
interest at a rate in excess of six percent per year during the
service member's period of military service. Interest that would
otherwise be incurred but for the prohibition in this section is
forgiven. The amount of any periodic payment due from a service
member under the terms of the instrument that created an obligation
or liability covered by this section shall be reduced by the amount
of the interest forgiven under this section that is allocable to the
period for which such payment is made.
2. In order for an obligation or liability of a service member to
be subject to the interest rate limitation in this section, the
service member shall provide to the creditor written notice and a
copy of the military orders calling the service member to military
service and any orders further extending military service, not later
than one hundred eighty days after the date of the service member's
termination or release from military service. Upon receipt of
written notice and a copy of orders calling a service member to
military service, the creditor shall treat the debt in accordance
with this section, effective as of the date on which the service
member is called to military service.
3. A court may grant a creditor relief from the limitations of
this section if, in the opinion of the court, the ability of the
service member to pay interest upon the obligation or liability at a
rate in excess of six percent per year is not materially affected by
reason of the service member's military service.
4. As used in this section, the term "interest" includes
service charges, renewal charges, fees, or any other charges, except
for bona fide insurance, with respect to an obligation or liability.
Section History: Recent Form
2002 Acts, ch 1117, §33, 40; 2006 Acts, ch 1143, §2
Referred to in § 29A.105