Kentucky late fee law

8%per year

Attaches to the debt by operation of law when you agreed no rate, so it accrues before any lawsuit and can be stated on a demand letter.

Except as provided in KRS 360.040 (judgment interest, reduced to 6% for judgments by 2017 amendments), the legal rate of interest is 8% per annum. A creditor under a written contract not specifying a rate may recover interest after default at the legal rate until judgment (KRS 360.010(4)). Verified against the official statute PDF on apps.legislature.ky.gov (text effective July 14, 2018).

Parties may agree in writing to a higher rate: (a) where the original principal is $15,000 or less, up to the lesser of 4% above the Federal Reserve 90-day commercial paper discount rate or 19%; (b) where the original principal exceeds $15,000, at ANY rate - so most B2B obligations above $15,000 have no usury cap. Where a written contract specifies a rate, that rate governs post-default interest until judgment (KRS 360.010(3)).

public+private-construction

State agencies must pay vendors within 30 working days of receipt of goods/services or invoice; late amounts accrue an interest penalty of 1% per month or fraction thereof (KRS 45.453-45.454). The Kentucky Fairness in Construction Act requires owners to pay undisputed construction pay requests within 30 business days and contractors to pay subcontractors within 15 business days of receipt, with 12% per annum interest on wrongfully unpaid amounts (KRS 371.405). No act covering ordinary private non-construction commercial invoices was found.

Distinctive risk: a federal court (W.D. Ky.) has held that flat monthly 'service charges' on delinquent commercial open accounts can constitute usurious interest under Kentucky law where they exceed the KRS 360.010 permitted rates and are not within a qualifying written agreement (see Stites & Harbison client alert) - flat late fees on Kentucky invoices, especially on obligations of $15,000 or less or without a signed writing, should be sized against the 8%/19% limits. Otherwise, agreed late fees follow the usual reasonable-liquidated-damages rule.