Many people assume that if a person owes you money, they also owe you interest and attorney’s fees if you have to hire a lawyer to collect what is owed to you. This is not true.
In South Carolina, there are only two situations when you are entitled to recover interest and/or attorney’s fees in addition to the principal amount you are owed on a debt. The first situation is when you have a written contract with the other party; in other words, you cannot recover interest or attorney’s fees on an oral contract. If you want to recover interest, the contract must state that if payments are not made on time, interest at a specific rate will be charged on the unpaid balance. If you want to recover attorney’s fees, the contract must state specifically that if you have to hire a lawyer to collect the debt, the other party must pay your reasonable attorney’s fees. What are reasonable attorney’s fees is up to the court.
The second situation is where a statute allows attorney’s fees to the successful party in a lawsuit. One such statute is the Mechanic’s Lien statute (Section 29 – 5 – 10, et seq., SC Code), which allows parties who furnished labor or materials for the improvement of real estate to put a lien on the real estate if they are not paid.
Even if you have loaned a large amount of money to another person and have a written note from that person promising to repay the debt, unless the written note contains language specifically allowing you to recover interest and/or attorney’s fees, you cannot recover them.