Everything freelancers and small businesses need to know about charging late fees, interest rates, and collecting overdue invoices in New Mexico.
This information is provided for general educational purposes only and does not constitute legal advice. Laws change frequently. Consult a licensed attorney in New Mexico for advice on your specific situation. Last reviewed: 2026.
Usury laws cap the maximum interest rate that can be charged on overdue payments in New Mexico.
15% per annum
New Mexico caps interest at 15% per annum (NMSA § 56-8-3). Default rate is 15%.
Banks, savings institutions, and licensed lenders are exempt.
Understanding what you can and cannot charge for late payments in New Mexico.
Late fees are allowed when contractually agreed. Must comply with the 15% cap.
No specific cap; interest-based charges limited to 15%.
Standard liquidated damages test.
New Mexico Prompt Payment Act sets deadlines and penalties for late payments in New Mexico.
30 days for state contracts.
Interest at 1.5% per month.
NMSA § 13-1-158 requires state agencies to pay within 30 days. Construction has specific provisions.
Certain industries in New Mexico have additional rules around payment timelines, liens, and collection procedures.
Construction: NMSA § 48-2-2 requires mechanics' lien filing within 120 days.
Government contracts: NMSA § 13-1-158 mandates 30-day payment with 1.5% monthly interest.
Energy: New Mexico's oil and gas industry follows standard commercial terms.
Use this compliant wording on your invoices to clearly communicate your late fee policy in accordance with New Mexico law.
Payment is due within 30 days. A late fee of 1.25% per month (15% per annum, the maximum under New Mexico law, NMSA § 56-8-3) will be applied to unpaid invoices.
This wording works because it clearly states the rate, when it applies, and references New Mexico legal standards. Always ensure your stated rate complies with New Mexico's usury limits.
Practical tips for invoicing within New Mexico's legal framework.
Before you can charge a late fee in New Mexico, your client needs to have agreed to the terms. Include your late fee clause directly on your invoice and in your contract.
New Mexico caps interest rates at 15% (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 New Mexico, documented reminder history strengthens your position. Automated systems keep logs automatically.
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Compare New Mexico's rules with neighboring and commonly referenced states.
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