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Dwayne B.
Dwayne B., Attorney
Category: Legal
Satisfied Customers: 32327
Experience:  Began practicing law in 1992
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I have a client that has owed me $3000 over a year

Customer Question

I have a client that has owed me $3000 for well over a year now. I am taking him to small claims court on Wednesday. He has probably 12 unpaid invoices and I need to know what I can charge in late fees, in addition to interest, on these invoices.
Submitted: 6 months ago.
Category: Legal
Expert:  Dwayne B. replied 6 months ago.
Hello and thank you for contacting us. This is Dwayne B. and I’m an expert here and looking forward to assisting you today. If at any point any of my answers aren’t clear please don’t hesitate to ask for clarification. Also, I can only answer the questions you specifically ask and based on the facts that you give so please be sure that you ask the questions you want to ask and provide all necessary facts. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms. Do you have some kind of agreement, preferably written, that explains he will be charged late fees if invoices aren't paid on time? This would need to have been entered into prior to the service being performed.
Customer: replied 6 months ago.
No but we did have an agreement to pay that was presented after the services were performed which he did not hold true to.
Expert:  Dwayne B. replied 6 months ago.
You're not going to be able to charge a "late fee" if it wasn't contracted for since that isn't mandated by law but is a function of a contract between the parties. You can, however, charge interest. You will want to phrase it as "Interest at the legal rate" or "legal interest" since it can vary and if it takes a while to collect on the judgment then you want to be able to vary it as well. If you have a contracted for interest rate then you can charge that amount and you would want to use it in the paperwork since it is likely higher than "legal interest".
Customer: replied 6 months ago.
So what would be the "legal rate" of interest I can charge and can that be capitalized?
Expert:  Dwayne B. replied 6 months ago.
Right now it is 8%. There is an article at http://statelaws.findlaw.com/colorado-law/colorado-interest-rates-laws.html and the website keeps it updated. The statute itself is at http://www.leg.state.co.us/2000/inetcbill.nsf/billcontainers/A2BCB7D5C64956858725684F004E29A3/$FILE/1117_01.pdf I'm not sure about the capitalization question but if you are asking whether you can charge interest on interest the answer is no.
Expert:  Dwayne B. replied 6 months ago.
You may want to consider getting a local attorney to draft a set of documents for your customers to sign that includes late fees, a specific rate of interest, specific details on attorney's fees as well as choice of venue and choice of law, probably mandatory arbitration, and some other standard language.

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