2020 Best Invention

New York State Pre- and Post-Judgment Interest Rates

4 minute read Upsolve is a nonprofit tool that helps you file bankruptcy for free. Think TurboTax for bankruptcy. Get free education, customer support, and community. Featured in Forbes 4x and funded by institutions like Harvard University so we'll never ask you for a credit card. Explore our free tool


In a Nutshell

If a creditor wins a court judgment against you, you’ll have to pay the money judgment amount and any interest the judge orders. This can be pre-judgment interest, which is the interest added to the debt owed. There’s also post-judgment interest, which is the interest added to the amount of the money judgment. On April 30, 2022, the judgment interest accrual rate will drop from 9% to 2% for debt collection cases in New York state.

Written by Attorney Curtis Lee
Updated March 10, 2022


A judgment is a court order in a civil or criminal case that represents a decision in a lawsuit. If a court enters a judgment in favor of a creditor suing you to recover a debt, it usually means the court is ordering you to pay back the debt plus other amounts. This additional money can include court costs, attorney’s fees, and interest. This type of judgment is also called a money judgment.

This article focuses on the interest component of a money judgment under New York law. This includes the two major types of interest — pre-judgment interest and post-judgment interest — and how they’re calculated. We’ll also discuss why courts often order judgment debtors to pay interest.

Explaining Pre-Judgment and Post-Judgment Interest 

As its name implies, pre-judgment interest applies to the debt before the court judgment. In contrast, post-judgment interest applies to the monetary judgment amount after the court judgment. Despite applying at different times, pre-judgment and post-judgment interest rates both exist to compensate a plaintiff for being deprived of the use of their money. 

Both types of interest are awarded at the court’s discretion. A judge may also decide whether the interest awarded will be simple or compounding. Simple interest applies strictly to the amount of the money judgment. Compounding interest applies to the amount of the judgment plus any prior interest.

Why Are Pre- and Post-Judgment Interest Used?

Pre-judgment interest has two functions. First, it compensates the plaintiff (also called a judgment creditor) for not having access to their money that was held by the defendant (also called a judgment debtor). Second, it forces the defendant to give up the financial benefit they received for holding on to money they shouldn’t have had in the first place. 

This second reason for awarding pre-judgment interest is more theoretical, especially for consumer debt lawsuits. The lawsuits usually arise because the consumer doesn’t have the money to back the debt. Not because the consumer refuses to pay back the debt. Despite this, courts want to prevent defendants from obtaining any perceived benefit from their improper conduct.

Post-judgment interest primarily benefits judgment creditors when they win their cases. Specifically, it compensates plaintiffs for the time period after the court judgment, but before they get paid by the defendant. Ideally, after a court grants judgment for the plaintiff, the defendant would immediately write a check or transfer funds to the plaintiff. But this usually doesn’t happen. 

Often, there’s a delay from the time of judgment to the time of payment. In some cases, this delay can last for months or years if there are post-judgment settlement discussions or the judgment debtor appeals the case. 

Upsolve User Experiences

744+ Members Online
Anita Thompson
Anita Thompson
★★★★★ 8 days ago
Upsolve was my answer to filing Chapter 7 bankruptcy. I couldn't afford an attorney and I was able to fill out the forms on my smartphone. It was explained in an easy-to-use format for the everyday lay person. This software is free to use and has YouTube videos as well. I highly recommend using Upsolve if you cannot afford an attorney.
Read more Google reviews ⇾
David
David
★★★★★ 9 days ago
I just had my 341 Meeting on May 5th at 10:30 am. The trustee first asked me to be sworn in by standing and raising my right hand. It was a little weird getting out my car, standing and raising my hand because I had to work that day, but I did so. I had to confirm my name for the record and have I read the bankruptcy information sheet; did I my petitions, and am I the one that signed then. Then the yes or no questions started exactly like the Upsolve 341 Meeting video. Have I filed bankruptcy before; my marital status; length of time since my divorce; do I owe alimony or child support; am I renting; place of employment; do I own a car; how much did I pay for it; have I ever owned real estate; view and verify the information on my tax form; have I listed all creditors. The trustee then said that he needed no further information, and there is nothing more I need to do and this concludes the meeting and I can hang up and finally breathed. The meeting lasted about 15 to 20 minutes! Now I’m waiting for the 60 days to be over, and pray that there truly is nothing more for me to do. Thank you so much Upsolve for being there for me, and for the chest compressions when the stress seemed a little too much at times. Your platform has truly been a blessing. I couldn’t have done this on my own. My prayers to everyone! Remember to breathe. One final thing. The questions that are asked by the trustee are not verbatim. They are similar. Just listen carefully and answer.
Read more Google reviews ⇾
Franky Gonzalez
Franky Gonzalez
★★★★★ 10 days ago
I was kinda scared at first to use with recommendation from local pro bono legal service told me use this service to file. I took me a few months to finally file. finally did it and what a huge relief. the community in general is very helpful.
Read more Google reviews ⇾

New York State Pre- and Post-Judgment Rates 

According to the New York Civil Practice Law and Rules (CPLR), the interest rate on a pre- or post-judgment is 9% per annum (year). But under a new law, starting April 30, 2022, this 9% interest rate will drop to 2% if the judgment debtor (defendant) is an individual who owes a consumer debt.

This change is the result of the Fair Consumer Judgment Interest Act (FCJIA) being signed into law in late 2021. This law applies to any consumer debt judgments that a court enters after April 30, 2022, the law’s effective date. But the FCJIA also applies retroactively to some extent. If the judgment debtor hasn’t fully paid the amount of the judgment they owe by April 30, 2022, any remaining balance will automatically start accruing interest at the new 2% annual rate instead of the old 9% rate.

The post-judgment interest rate for monetary judgments in personal injury cases in New York state court is 2% per month (or 24% per year).

Federal Post-Judgment Interest Rates 

Federal law permits judges to order interest on most judgments entered in federal district courts. This federal post-interest judgment interest is similar to the judgment interest in the state of New York in that interest begins to accrue from the date of judgment and continues accruing until the judgment is paid off. But when it comes to calculating the exact interest rate, federal law is a bit more complicated.

New York state law clearly states its statutory interest rate. Federal law is different because the federal post-judgment interest rate changes every week. It’s calculated by looking at the weekly average interest rate of a one-year treasury bill (sometimes called a “T-bill”) for the week immediately preceding the date of the entry of judgment. The interest rate for the one-year treasury bill is published by the Board of Governors of the Federal Reserve System every Monday and can be found on the Selected Interest Rates (Daily) – H.15 page

If this interest rate computation sounds a bit too complicated, don’t worry. You can get a simple answer to what post-judgment interest rate applies to your case by visiting the Post-Judgment Rates page from the U.S. Bankruptcy Court for the Southern District of California. On that page, you can find an interest calculator that tells you what the post-judgment interest rate is for judgments entered during the current calendar week. This applies to everyone, not just Californians. Historical data is also available in case you’re curious about what the applicable rate of interest used to be years ago.

Let’s Summarize…

After a judge decides on a consumer debt lawsuit, the court enters judgment for the winning side. If the plaintiff wins, the defendant becomes a judgment debtor. Besides the unpaid debt, the judgment debtor may also have to pay pre- and/or post-judgment interest.

Pre-judgment interest exists to compensate plaintiffs for not having access to their money until a judgment is entered. It also addresses any financial benefit the judgment debtor may have had from holding onto money instead of paying a debt. Post-judgment interest compensates the plaintiff for not having their money for the time period between the entry of judgment and the defendant paying the plaintiff in full.

For New York state debt collection cases, pre- and post-judgment interest have an accrual rate of 9%. But on April 30, 2022, this rate drops to 2%. In federal court, the post-judgment interest rate is calculated by looking at the weekly average interest rate of the constant maturity treasury yield of the one-year treasury bill.



Written By:

Attorney Curtis Lee

LinkedIn

Curtis Lee is a writer and co-owner at Marvel Hill Freelance. Curtis earned his Bachelor of Science in Business from Wake Forest University and his Juris Doctor from Villanova University School of Law. After graduating law school, Curtis had the honor of clerking for a state cou... read more about Attorney Curtis Lee

It's easy to get help

Choose one of the options below to get assistance with your bankruptcy:

Free Web App

Take our screener to see if Upsolve is right for you.

Take Screener
9,326 families have filed with Upsolve! ☆
or

Private Attorney

Get a free bankruptcy evaluation from an independent law firm.

Find Attorney

Learning Center

Research and understand your options with our articles and guides.

Go to Learning Center →

Already an Upsolve user?

Read Support Articles →

News

    + Show Articles

    Upsolve is a 501(c)(3) nonprofit that started in 2016. Our mission is to help low-income families who cannot afford lawyers file bankruptcy for free, using an online web app. Spun out of Harvard Law School, our team includes lawyers, engineers, and judges. We have world-class funders that include the U.S. government, former Google CEO Eric Schmidt, and leading foundations. It's one of the greatest civil rights injustices of our time that low-income families can’t access their basic rights when they can’t afford to pay for help. Combining direct services and advocacy, we’re fighting this injustice.

    To learn more, read why we started Upsolve in 2016, our reviews from past users, and our press coverage from places like the New York Times and Wall Street Journal.