Delinquency Interest Calculator

How delinquency interest actually works

When a shareholder doesn't pay an assessment by its due date, most ditch company bylaws allow the company to charge interest on the unpaid balance until it's paid. Colorado's ditch-company statute, C.R.S. Title 7, Article 42, doesn't set an interest rate or method for delinquent assessments — that's left entirely to each company's own bylaws. What the statute does provide is stronger: under C.R.S. 7-42-104(3), an unpaid assessment becomes a perpetual lien on the shareholder's shares and water rights, and the company has the power to withhold water delivery until it's paid. Forfeiting the shares themselves is a further step, and the statute requires at least 30 days' written notice before that can happen.

Because the rate and the method are bylaws decisions, they vary company to company. One common example, from DARCA's model bylaws, charges 18% per year, compounded — but that's one template, not a legal default, and plenty of companies' bylaws set something different, or don't address interest at all. Check your own bylaws before you rely on a rate; if they're silent on interest entirely, that's worth raising with your board before you start charging it to anyone.

Simple vs. monthly vs. annual compounding

Simple interest charges the rate against the original principal only, for the whole time it's overdue — the interest itself never earns more interest. Monthly and annual compounding add accrued interest back into the balance at the end of each period, so the next period's interest is calculated on a slightly larger number. Over a single year the difference between simple and monthly-compounding interest is usually modest on typical assessment amounts; on a balance that's gone unpaid for several years, compounding adds up faster. Use whichever method your bylaws specify — if they just say "18% interest" without saying how it compounds, that's a good bylaws-clarity question for your board, not something this tool can guess for you.

What the grace period does

Many companies don't start charging interest the instant an assessment is late — bylaws often build in a grace period, a number of days after the due date before interest starts accruing. Thirty days is a common example. During the grace period, the amount owed is still just the principal; interest only starts building once the grace period ends. This tool's "Days accruing interest" figure already accounts for that gap, so it's typically fewer than the raw "days overdue" count above it.

Why the as-of date matters

The "as-of date" is whatever day you want the answer for — usually today, but not always. If you're reconciling last year's books, catching up a ledger that fell behind, or preparing a notice to mail next week, set the as-of date to that specific day and the tool calculates exactly what was, is, or will be owed as of that date. Interest keeps accruing every day a balance stays unpaid, so a number calculated today will be out of date the next time someone asks — reprint it fresh rather than reusing an old printout.

What to check in your bylaws before you bill anyone

Before using a number from this tool in an actual notice to a shareholder, confirm four things against your company's own bylaws: the interest rate, whether it's simple or compounding (and how often), whether there's a grace period and how long it runs, and whether a partial payment gets applied to interest first or principal first. None of that is standardized by Colorado law — it's set by whatever your company's founders or a later board wrote into the bylaws, and it can only be changed the way your bylaws say amendments happen.