Delaware Statutory Interest Rate and Prejudgment Interest in Small Claims

Most Delaware small claims plaintiffs leave money on the table by forgetting to claim prejudgment interest. If someone owes you money and has been sitting on it for months or years, Delaware law sets a statutory interest rate you may seek — and it accrues from the date the obligation was breached, not the date you filed suit.

The Legal Interest Rate Formula

Under 6 Del. C. § 2301, the statutory interest rate in Delaware is 5% over the Federal Reserve discount rate as of the date of breach or judgment entry.

If your contract specifies its own interest rate, that rate controls. The statutory rate is the default when there's no contractual provision — which is the case for most small claims disputes (unpaid invoices without interest terms, security deposit claims, property damage, personal loans between friends).

Post-judgment interest uses the same formula and accrues automatically on the unpaid principal until the judgment is fully satisfied.

When Prejudgment Interest Starts Running

The accrual date depends on your type of claim:

Breach of contract / unpaid debt: Interest runs from the date of breach or nonpayment under the contract. For an invoice, determine that date from its payment terms; it is not the date you file suit.

Property damage (trespass): Interest runs from the date the damage occurred.

Security deposit violations: Under 25 Del. C. § 5514, the landlord must return the deposit or provide itemized deductions within 20 days after lease termination and surrender. That deadline alone does not establish the interest start date.

Settlement negotiations, demand letters, and mediation do not pause interest accrual. The clock runs until judgment is entered or the debt is paid.

How to Calculate It

Here's the practical math. Suppose you're owed $5,000 on an unpaid invoice, the breach date was 21 months before filing, and the Federal Reserve discount rate on that breach date was 4.50% (an illustrative assumption). The statutory rate would be 9.50% annually.

$5,000 × 9.50% × (21/12) = $831.25 in prejudgment interest.

Your total claim would be $5,831.25 — still well within the JP Court's $25,000 ceiling.

For shorter periods, calculate interest for the elapsed time using the applicable annual rate. Include a line item in your complaint showing the calculation so the judge can verify it.

How to Claim It in Your Complaint

On Form CF01, your total demand should include both the principal amount and the calculated prejudgment interest through the filing date. In the statement of facts section, specify:

• The principal amount owed
• The applicable interest rate and its source (6 Del. C. § 2301, or the contractual rate if one exists)
• The accrual start date
• The calculated interest amount through the filing date
• A note that additional interest continues to accrue until judgment

Some plaintiffs include a one-page interest calculation worksheet as an attachment to the complaint. This isn't required, but it makes the judge's job easier and strengthens the impression that your claim is precise and well-documented.

Common Mistakes

Not claiming it at all. If you want the court to award prejudgment interest, request it in your complaint and show the basis for your calculation.

Using the wrong start date. Interest runs from the date of breach or damage, not the date you sent a demand letter or filed the lawsuit.

Confusing the statutory rate with a flat 5%. The rate is 5% plus the Federal Reserve discount rate, not 5% alone. The actual rate will be higher than 5% unless the discount rate is at zero.

Forgetting to update the calculation. If months pass between filing and the hearing, prepare an updated interest calculation through the trial date.

The Filing a Small Claims Case in Delaware guide includes a prejudgment interest calculation worksheet and a deadline calendar that tracks accrual dates alongside every other procedural step.

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