I made a no-interest short term loan to a family member and have documentation of the debt, and he did not pay me back in the stipulated time frame.

If I take legal means to recover the money owed, can I make a claim for interest at some statutory rate, or can I only recover the principal, no matter how overdue the debt is?

  • Is this a small-claims amount, or something you need to recover in superior court?
    – Ron Beyer
    Dec 17, 2018 at 2:59
  • I appear to be missing something. If the loan was (agreed to be) on a no-interest basis, why would a court ever award interest? Feb 4, 2019 at 23:01
  • @TimLymington That's what I am asking about, statutory interest. For example, let's imagine a trustee had $100,00 of your money and for whatever reason refused to give it to you and it took you 10 years to find the trustee and receive a judgement against them. Would you be able to claim statutory interest for the 10 years the trustee held the money? I think there is law on this, I just don't know what it is.
    – Cicero
    Feb 5, 2019 at 0:52

1 Answer 1


The section in Massachusetts law is here; it says "In all actions based on contractual obligations, upon a verdict, finding or order for judgment for pecuniary damages, interest shall be added by the clerk of the court to the amount of damages, at the contract rate, if established, or at the rate of twelve per cent per annum from the date of the breach or demand".

It is not, however, as simple as that makes it sound. Suing a family member is never straightforward, as courts tend to assume that such loans are not purely commercial, and so are not necessarily "based on contractual obligations". Your other suggestion, of a trustee who pays late, is even worse. If you can't find the trustee to ask for your money, there may be no reason for him to pay you; there is certainly no "breach or demand". And 12%, though it may have been reasonable when the law was passed, is considerably above market rate now, so the court might decide that disallowing interest is fairer than enforcing the section (there appears to be no way to reduce the amount added, though amending the law is under consideration).

  • 1
    Could you stipulate to a lower interest rate in your action? Why would you want to, nevermind why, just say it's a fetish of mine to appear eminently reasonable. Sep 1, 2019 at 21:56
  • Given the wording of the statute, I would say not, though you would need to be a Massachusetts lawyer to be sure (or actually, a Massachusetts judge). "I am entitled to the house, but I am suing for just the top floor" sounds distinctly unimpressive. Sep 2, 2019 at 7:59

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