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Post-Judgment Interest

One of the things most people are surprised to learn is that if they sue someone for money and win, the court does not actually help them collect their money. In general, the judge will sign an order stating that Person X (say, the plaintiff) is awarded $X and that’s it. It is up to Person X to actually go and collect that money somehow. This collection might be easy and quick or it could be difficult and very time-consuming.

If your situation happens to fall in the latter camp, one protection you might have is post-judgment interest. The idea of post-judgment interest is that it is interest that accrues from the date the judgment is signed by the judge and filed by the court. The details of this arrangement (e.g. the precise interest, whether the interest is simple or compound, etc) will depend on what jurisdiction your case is in.

In California, for example, post-judgment interest is 10% simple per year, as specified in California Code of Civil Procedure section 685.010(a). A common question California creditors ask is whether the attorney’s fees they incur while collecting on their debt can be added to the debt. California Code of Civil Procedure section 685.040, unfortunately, says no, unless otherwise provided for by law or as part of the underlying judgment. Other costs besides attorney’s fees, however, should be recoverable. As always, consult with an attorney to see precisely what applies in your situation. An exception to this may be when the debtor is the government. In that case, the interest rate may be capped at 7 percent under California Civil Code section 3287(c).

If your case is in New York, post-judgment interest is 9% simple per year under Civil Practice Law and Rules section 5004. In federal court, the applicable statute is 28 USC 1961. Under the federal system, however, there is no interest rate figure (e.g. 10%, 9%, etc) to cite to. Instead, post-judgment interest accrues under the federal system at a rate equal to the “weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors for the Federal Reserve System, for the calendar week preceding the date of the judgment.”

As always, hopefully the above information was helpful for your own personal curiosity or for a case you find yourself in. If you do have a situation in which the above information is useful, I encourage you to consult a lawyer if you have any doubts as there can be a huge amount of detail involved in even the most seemingly simple case.

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Andy Chen

Andy I. Chen is a lawyer licensed to practice law in California and New York. Andy maintains offices in Los Altos, California and Modesto, California. Under the New York Court of Appeals' 2015 decision in Schoenefeld v. State of New York, Andy does not accept cases from those in New York state. He does, however, know many lawyers in New York state and would be happy to make a referral.

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