Everything freelancers and small businesses need to know about charging late fees, interest rates, and collecting overdue invoices in Louisiana.
This information is provided for general educational purposes only and does not constitute legal advice. Laws change frequently. Consult a licensed attorney in Louisiana for advice on your specific situation. Last reviewed: 2026.
Usury laws cap the maximum interest rate that can be charged on overdue payments in Louisiana.
12% per annum
Louisiana caps interest at 12% per annum (La. R.S. 9:3500). Louisiana's unique civil law tradition influences interpretation of interest provisions.
Banks, licensed financial institutions, and certain commercial transactions are exempt.
Understanding what you can and cannot charge for late payments in Louisiana.
Under Louisiana's civil law, late fees are governed by La. Civ. Code art. 2005 as liquidated damages. Must not be manifestly excessive.
No specific cap; interest-based charges limited to 12%. Courts may reduce manifestly excessive damages.
Under La. Civ. Code art. 2005, courts may reduce manifestly unreasonable liquidated damages.
Louisiana Prompt Payment Act sets deadlines and penalties for late payments in Louisiana.
30 days for state contracts; 14 days for construction subcontractor payments.
Interest plus attorney's fees.
State agencies must pay within 30 days. For construction (La. R.S. 9:2784), contractors must pay subcontractors within 14 days of receiving payment.
Certain industries in Louisiana have additional rules around payment timelines, liens, and collection procedures.
Construction: Louisiana's Private Works Act (La. R.S. 9:4801) governs construction liens (privileges). Notice of contract must be filed.
Government: 30-day payment. Construction subcontractors paid within 14 days under La. R.S. 9:2784.
Oil and gas: Specific payment provisions for mineral royalties and oilfield services.
Use this compliant wording on your invoices to clearly communicate your late fee policy in accordance with Louisiana law.
Payment is due within 30 days. A late fee of 1% per month (12% per annum, the maximum under Louisiana law, La. R.S. 9:3500) will be applied to unpaid invoices.
This wording works because it clearly states the rate, when it applies, and references Louisiana legal standards. Always ensure your stated rate complies with Louisiana's usury limits.
Practical tips for invoicing within Louisiana's legal framework.
Before you can charge a late fee in Louisiana, your client needs to have agreed to the terms. Include your late fee clause directly on your invoice and in your contract.
Louisiana caps interest rates at 12% (statutory). Charging above this limit can void your right to collect interest entirely and may expose you to penalties.
A reminder 3 days before the due date and a follow-up the day after dramatically reduces late payments. Automated reminders ensure nothing slips through the cracks.
If you ever need to escalate collection efforts in Louisiana, documented reminder history strengthens your position. Automated systems keep logs automatically.
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Compare Louisiana's rules with neighboring and commonly referenced states.
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