Late Fee Laws for Freelancers in Virginia

Virginia has a quiet but useful protection most freelancers don't know about: if your invoice goes unpaid for more than 60 days and you never wrote a specific interest rate into your contract, Virginia law lets you charge interest automatically anyway. Here's what Virginia freelancers need to know about late fees, from the Code of Virginia's interest provisions to collecting through small claims court.

Virginia's 6% Legal Interest Rate — and an Automatic 60-Day Trigger

Virginia's legal interest rate is 6% per year (Va. Code § 6.2-301), and this is the rate courts apply to judgments and to contracts that don't specify their own rate (Va. Code §§ 6.2-301, 6.2-302). What's less well known: under Va. Code § 6.2-301(C), if you sell goods or provide services on an open account — meaning there's no separate written credit agreement — and the client doesn't pay in full within 60 days of your invoice or billing statement, you're entitled to collect interest at the legal rate (6%) starting the day after that 60-day window closes. You don't need a late fee clause in your contract for this baseline protection to apply.

That's a helpful floor, but most Virginia freelancers still write the nationwide standard of 1.5% per month (18% annually) into their contracts, since it's both higher and enforceable as long as it's disclosed in writing before work begins.

Why Writing Your Own Rate Still Matters

What's the Maximum Late Fee in Virginia? The 5% Late-Charge Rule

Virginia is one of the few states with a statute that sets a number for a late charge — the flat or percentage fee for paying late, as distinct from interest. Under Va. Code § 6.2-400, a lender or seller may impose a late charge on any payment due on a debt, "whether installment or single maturity," if:

• the charge is specified in the contract with the debtor;
• it does not exceed 5% of the payment that's late; and
• the payment is more than 7 calendar days late — a payment made within seven days after the due date counts as on time.

Any charge above the limit is void as to the excess; the rest of the debt stays enforceable. The statute was written with lending and seller financing in mind, and whether it reaches every freelance service invoice hasn't been tested — but it's the clearest number Virginia law gives for a late charge, so it's the safe ceiling to design around. On a $3,000 invoice, that's a one-time late charge of no more than $150, charged no earlier than day 8.

Can You Charge Interest on a Late Fee in Virginia?

Virginia's statutes don't address interest on a late charge directly, so the safest answer is charge interest on the unpaid invoice balance, not on the late fee. Interest on a late fee is a fee on top of a fee: it makes the late charge grow every month, which is exactly what the one-time, capped structure of § 6.2-400 is designed to prevent, and it's the kind of compounding a court is most likely to read as a penalty. If a client disputes the bill, you want every line to trace back to either the invoice amount, the agreed rate, or the one-time charge — nothing that grows on itself.

Setting Up Enforceable Late Fees in Virginia

• Specify your own rate in writing. "Invoices unpaid after 15 days accrue interest at 1.5% per month" both beats the 60-day/6% default and starts the clock earlier.
• Reference the rate on every invoice so it's visible without digging through the contract.
• Keep the rate reasonable and separate from any flat charge. 1–1.5% per month on the unpaid balance is the common range; a one-time late charge, if you use one, stays at or under 5% of the payment (§ 6.2-400).
• Document your invoice dates. If you ever need to rely on the 60-day automatic rule, you'll need to show exactly when the invoice or billing statement was sent.

Collecting in Virginia

Virginia's General District Court handles small claims up to $5,000 through its small claims division — informal, no attorney required, and designed for straightforward money disputes like unpaid invoices. Claims above $5,000 still go to General District Court, just outside the small claims division, and can involve more formal procedure.

• Virginia Small Claims (General District Court): up to $5,000 — no attorney required
• Virginia General District Court (regular civil docket): for claims above $5,000, up to $25,000
• Judgment interest: 6% annually or the contract rate, whichever is higher (Va. Code § 6.2-302)

Virginia's 60-day automatic interest rule is a rare safety net that most freelancers never learn about until they need it — but it's not a substitute for writing your own rate into every contract. Set your terms clearly, invoice consistently, and use the General District Court's small claims division for anything under $5,000 when a client won't pay.

Frequently Asked Questions