Montana gives an unpaid invoice 10% a year from the day it's due even without a late fee clause, and eight years to sue on a written contract. In exchange, it caps agreed rates at the greater of 15% or prime plus 6 — so the national-standard 1.5% a month doesn't quite fit. Here's what Montana freelancers and small businesses need to know.
Montana Late Fee Calculator
Quick estimate at 1.25%/month — 15% a year, inside Montana's agreed-rate ceiling under any reading. For grace periods, flat fees, and a PDF invoice, use the full late fee calculator.
No Rate in the Contract? Montana Gives You 10% From the Due Date
Under Mont. Code Ann. § 31-1-106, interest is payable at 10% a year after money becomes due on written instruments and accounts stated — which is what an accepted invoice becomes. That's at the high end of statutory defaults: Colorado gives 8%, Idaho 12%, many states 5–6%. It runs from the due date, not from the day you file suit, and a written contract rate replaces it.
The Agreed-Rate Ceiling: 15% or Prime + 6
Mont. Code Ann. § 31-1-107 lets parties agree in writing to any rate up to the greater of 15% a year or 6 percentage points above the prime rate, measured from the Federal Reserve's published prime three business days before the agreement is signed. Whenever prime is below 9%, prime + 6 comes in under 15% — so in practice 15% is the operative ceiling.
Why the calculator defaults to 1.25% a month. The statute is written for loans, and whether it caps a late charge on a service invoice hasn't been settled. 1.25% a month is exactly 15% a year — inside the ceiling under any reading. The national-standard 1.5% a month (18%) only fits when prime is at 12% or higher — far above where it has been in recent decades.
Whatever rate you write, state it monthly or annually — a fee written per day compounds past any ceiling. See is a daily late fee legal on an invoice.
Montana Small Claims: $7,000
Montana's small claims court hears claims up to $7,000, exclusive of costs (Mont. Code Ann. § 25-35-502), as long as the client can be served in the county where you file. Lawyers generally don't represent parties at the hearing, and a client that's an LLC or corporation appears through an officer or employee. Above $7,000 you're in regular civil court. Is it worth suing a client over an unpaid invoice runs that trade-off against your own time.
Eight Years on a Written Contract
Mont. Code Ann. § 27-2-202 gives 8 years to sue on a written contract and 5 years on an oral contract or an account. Both are long by national standards, but the three-year gap is a good reason to get even small engagements confirmed in writing — an email thread where the client accepts your quote and terms counts.
How Montana Compares to Its Neighbors
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| State | Rate rule | Small claims limit |
|---|---|---|
| Montana | 10%/yr default; agreed rate up to the greater of 15% or prime + 6 | $7,000 |
| Idaho | 12%/yr default; no general cap on a written rate | $5,000 |
| Utah | 10%/yr default; any agreed rate allowed | $20,000 (to $25,000 in 2030) |
| Colorado | 8%/yr default; no commercial ceiling once written | $7,500 |
| Washington | No cap on commercial late fees once written | $10,000 |
Montana sits between its neighbors: a stronger no-contract default than Colorado, a stricter written-rate ceiling than Idaho or Utah. Freelancers in western Montana often bill Idaho and Washington clients — see the Idaho and Washington guides.
Setting Up Enforceable Late Fees in Montana
- Write 1.25% a month (15% a year) — the rate that fits under § 31-1-107 regardless of prime.
- Get the engagement in writing — 8 years to sue instead of 5, and a written rate replaces the 10% default.
- Put the rate and due date on every invoice, so an accepted invoice is clearly an account stated.
- Check where the client can be served before choosing small claims — it has to be the county where you file.
Collecting in Montana
- Small claims: up to $7,000, exclusive of costs (§ 25-35-502)
- Default interest with no agreed rate: 10% a year after money becomes due (§ 31-1-106)
- Agreed-rate ceiling: greater of 15% a year or prime + 6 points (§ 31-1-107)
- Statute of limitations: 8 years for written contracts, 5 years for oral contracts and accounts (§ 27-2-202)
Need to calculate exactly what your Montana client owes with late fees included? Get the updated total instantly.
Calculate Late Fees →Montana gives freelancers a solid 10% default and a long eight-year window on written contracts, in exchange for a tighter ceiling on what you can write in. Use 1.25% a month, put every engagement in writing, and most unpaid invoices fit inside the $7,000 small claims track.
Frequently Asked Questions
Is there a free Montana late fee calculator? +
Yes. The quick calculator above estimates the fee at 1.25% a month, which is 15% a year and stays within Montana's agreed-rate ceiling under any reading. For grace periods, flat fees and a downloadable PDF, use GetSoloTools' full late fee calculator.
What interest applies in Montana if my contract doesn't state a rate? +
10% a year after the money becomes due, under Mont. Code Ann. § 31-1-106, for written instruments and accounts stated. That is one of the higher statutory defaults in the country, and it applies from the due date rather than from the day you sue.
What is the maximum late fee in Montana? +
Mont. Code Ann. § 31-1-107 lets parties agree in writing to any rate up to the greater of 15% a year or 6 percentage points above the prime rate, measured three business days before the agreement is signed. The statute is written for loans, so its reach over a service invoice is not settled, but 1.25% a month (15% a year) is within it in any case. The common 1.5% a month (18%) fits only when prime is at 12% or higher.
What is the small claims limit in Montana? +
$7,000, exclusive of costs, under Mont. Code Ann. § 25-35-502, and the defendant must be servable in the county where you file. Attorneys generally do not represent parties at small claims hearings, and a business can appear through an authorized officer or employee.
How long do I have to sue for an unpaid invoice in Montana? +
Eight years on a written contract and five years on an oral contract or an account (Mont. Code Ann. § 27-2-202). Get the engagement in writing to keep the longer window.