# Chasing bad debt: Entitled to charge interest? Legal options?



## Dinarius (17 Apr 2009)

I am owed €1665 plus VAT for exactly one year now.

The product was digital images. The client used the images - they were published in a book and I am credited by name in it.

1. The client is in breach of copyright for having used the images without paying for them.

2. It is more than 12 months since I did the work.

Am I entitled to issue a new invoice now that includes interest on the outstanding sum? If so, how much interest can I charge?

Though I would happily settle for a lesser amount - I don't like messy situations like this - I am also wondering what my other options are to try and get my money? For example, what would I have to do to make a claim in the small claims court?

Many thanks.

D.


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## Graham_07 (17 Apr 2009)

I believe you cannot go through the small claims court for commercial debts. ( There was another thread on this recently )

Late payment legislation permits interest charges. The detail is on the DETE site here


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## rubywalsh (17 Apr 2009)

There was a post on this a while ago so try searching. As far as I remember you can downlaod a form for the District Court, get it stamped and send it to the people who owe you money.
Can anyone else elaborate on this?


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## elgransenor (20 Apr 2009)

Dinarius,
You can't use the Small claims court for commercial debt collection.

There is an article on the small claims court on my website....and the debt collection procedure in general.

Whether you can charge interest or not depends on your invoice and the terms and conditions concerning your contract which is what you have with your creditor.


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## askalot (20 Apr 2009)

elgransenor said:


> Whether you can charge interest or not depends on your invoice and the terms and conditions concerning your contract which is what you have with your creditor.



Not according to the DETE wbsite :

http://www.entemp.ie/enterprise/smes/latepay.htm

In particular this may be of use:

"Q3. What is the interest rate and how do I calculate the interest charge?

Unless otherwise specified in an agreed contract, the penalty interest rate is the European Central Bank main refinancing rate plus 7 percentage points. The ECB rates in force on 1 January and 1 July apply for the following six months in each year. Only one rate will apply to a late payment - that is the rate in force on the payment date.

From the 1st January 2009, the late payment interest rate is 9.50% per annum (that is based on the ECB rate of 2.50% plus the margin of 7%). That rate equates to a daily rate of 0.026%. Penalty interest due for late payments should be calculated on a daily basis. The ECB rate can be checked on the Central Bank and Financial Services Authority of Ireland website www.centralbank.ie.

To calculate the interest due on a late payment the amount of the debt should be multiplied by the number of days in excess of 30 for which the payment is late and by the daily interest rate in operation at the time.

For example

On a debt of €1000 that is outstanding for 55 days (i.e. payment is late by 25 days), the calculation is as follows; €1000 X 25 X 0.026 = 650 = €6.50.

The purchaser settling the debt at that stage should pay €1006.50 plus compensation for recovery costs if applicable.

You may of course set your own interest rate and payment period in agreement with the purchaser.''


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