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A client didn't pay as agreed.. months have passed, she still haven't paid. what is the most I can charge for late fees?

Columbia, MD |

I'm a travel agent a client paid a deposit of her trip. I paid the balance, she was suppose to pay her payments and she didn't. Now I'm stuck with the bill. I'm taking her to court, but I need to know what is the most I would be able to charge her for late fees. Its been 6 months and I haven't heard anything from her

Attorney Answers 3

  1. Unless she agreed--explicitly or by accepting an offer you made, or by not paying after you said you would begin charging interest--to pay late fees or interest or whatever, the answer is zero. Most maximum interest rates are in title 12 of the Commercial Law article of the Maryland Code, especially in 12-103. But interest is a matter of agreement, except that post-judgment interest is 10% a year from the date judgment is entered.

    Licensed in Maryland with offices in Maryland and Oregon. Information here is general, does not create a lawyer-client relationship, and is not a substitute for consulting with an experienced attorney on the specifics of your situation.

  2. It depends on the contract you had with her. If the contract spells out the damages for breach to include late penalties, interest, atty fees and costs for collection efforts then you can make the argument to the court that each of the damages you are pursuing are reasonable. Note that just because it may be in the contract, doesn't mean the court will find it reasonable. If you do not have said damages in your contract you will have to demonstrate to the court what actual damages you incurred due to her breach. Incidental damages, can be requested but you will have to not only substantiate them but demonstrate the nexus.

  3. Absent a provision in your contract providing for it, you cannot claim late fees. You can, however, claim pre-judgment interest of 6.0% calculated on an annual basis. It is simple interest, not compounded (meaning, you do not earn interest on past due interest). To figure the daily rate, just multiply the amount due by the annual rate of .06, and then divide by 365 days in a year. You would then multiply that amount by the number of days which pass between the date the money became due and the day of trial. After judgment, you earn 10% simple annual interest on the principal balance of the judgment until it is paid off.

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