Late Fees on Invoices in Indiana
What Indiana contractors and small businesses need to know about charging late fees, interest rates, prompt payment laws, and mechanics lien deadlines.
Max Interest Rate
8% per annum (default legal rate); 1% per month on construction by statute
Small Claims Limit
$10,000
Small Claims Court
Mechanics Lien Deadline
90 days from the last day of performing labor or furnishing materials
Indiana Prompt Payment Act
Indiana Prompt Payment Statute, Ind. Code § 5-17-5 et seq.
Indiana requires public agencies to pay within 35 days. Private construction follows the contract, with mechanics lien rights under Ind. Code § 32-28.
Late fee rules for Indiana invoices
Indiana allows contractual late fees that are reasonable. Courts review late fees as liquidated damages and may void those deemed punitive.
Indiana's default legal interest rate is 8% per annum. The Prompt Payment Statute provides for interest at 1% per month on overdue public construction payments.
Important disclaimer
This page provides general information about Indiana late fee rules. It is not legal advice. Laws change, and your specific situation may have unique factors. For disputes involving significant amounts, consult a licensed attorney in Indiana.
Demand letters and mechanics liens in Indiana
Indiana requires a Notice of Intent to Hold a Mechanics Lien before filing. This notice effectively serves as a formal demand.
Mechanics lien deadline: 90 days from the last day of performing labor or furnishing materials. A Notice of Intent to Hold a Mechanics Lien must be filed.
Sample late fee clause for Indiana invoices
“Payment is due within the terms specified above. A late fee of 1.5% per month (8% per annum (default legal rate); 1% per month on construction by statute maximum per Indiana law) will be applied to all balances remaining unpaid after the due date. Pursuant to Indiana Code § 32-28-3-1 et seq. (Mechanics' Liens), the undersigned reserves all rights to pursue collection including but not limited to mechanics lien filing, small claims action (up to $10,000 in Small Claims Court), and referral to collections.”
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Start Free TrialFrequently asked questions — Indiana
What is the maximum late fee I can charge on an invoice in Indiana?▾
In Indiana, Indiana's default legal interest rate is 8% per annum. The Prompt Payment Statute provides for interest at 1% per month on overdue public construction payments. Always disclose late fee terms in your contract or invoice before work begins.
Does Indiana have a prompt payment act?▾
Yes. Indiana requires public agencies to pay within 35 days. Private construction follows the contract, with mechanics lien rights under Ind. Code § 32-28.
What is the small claims court limit in Indiana?▾
The small claims court limit in Indiana is $10,000. Claims are filed in Small Claims Court. You generally do not need an attorney for small claims.
How long do I have to file a mechanics lien in Indiana?▾
In Indiana, 90 days from the last day of performing labor or furnishing materials. A Notice of Intent to Hold a Mechanics Lien must be filed.
Do I need to send a demand letter before filing a lien in Indiana?▾
Indiana requires a Notice of Intent to Hold a Mechanics Lien before filing. This notice effectively serves as a formal demand.