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Can I charge intrest...

Discussion in 'Business Operations' started by DPruett2333, Jul 29, 2005.

  1. DPruett2333

    DPruett2333 LawnSite Member
    Messages: 59

    I have a customer who owes me $120 clear back from May. My question is...Can I charge intrest on the work I performed even if I didn't tell him about a "late fee" or nothing about intrest added after a certain date was on the statement he received??
     
  2. rodfather

    rodfather LawnSite Fanatic
    Messages: 9,501

    Only with a signed contract or agreement can you charge late fees and/or interest. Period
     
  3. Mdirrigation

    Mdirrigation LawnSite Gold Member
    Messages: 3,752

    You can charge it , the question is wether the customer will pay it.
     
  4. SouthernYankee

    SouthernYankee LawnSite Senior Member
    Messages: 789

    Rod,

    Are there limits on what you can charge? I am only talking about the difference between 2% and 5%.
     
  5. rodfather

    rodfather LawnSite Fanatic
    Messages: 9,501

    Yes, there are limits governed by the Federal Government...comes under the heading of usary laws. Try and collect over the limit and they then consider you a loan shark...really.

    But back to your question. Unless your contract or agreement states that interest, late fees, penalites, attorney fees, etc., are stupulated in the contract and signed by your customer, there is no way any court of law will abide by you just randomingly assigning some interest fee to your overdue invoice.

    Sorry to be the one to tell you this, but it's that simple.
     
  6. rodfather

    rodfather LawnSite Fanatic
    Messages: 9,501

    Almost forgot.

    Rule of thumb is 1.5% per month (18% annum) on interest and/or late fee. Over that %, you are up near the credit card and finanace companies and they stay just under the wire from being looked as loan sharks as well...perhaps some of them are :rolleyes:
     
  7. Runner

    Runner LawnSite Fanatic
    Messages: 13,497

    You have to send a letter of intent, and it has to be given 30 days AFTER the letter to even take effect. The 18% (1.5) is it, but it doesn't amount to jack squat. Here's another thing you can do...don't charge interest, but charge a Late Fee. A set amount for overdue payments beyond x amount of time. THAT hits them harder.
     
  8. Team Gopher

    Team Gopher LawnSite Platinum Member
    from -
    Messages: 4,040

    <marquee loop="infinite" bgcolor="#DDDDDF"><font color="#000000">Have a tax question? Need free business advice? Ask our CPA. Click Here </font></marquee>
    Hi DPruett2333,

    If you are interested, here is a post on small claims court. It might be helpful.

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  9. bohiaa

    bohiaa LawnSite Fanatic
    Messages: 5,220

    I dont think charging interest is an issue in this case..

    Getting what's owed to you is.
     

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