What Is The Interest Rate On Judgments

An unpaid judgment accrues interest at the rate of 9% in New York. This applies to unpaid child support and maintenance as well as equitable distribution awards.

Recently, the ex-husband of a new client wanted to payoff a judgment that had been entered against him at the conclusion of his divorce case in 2011. The ex-husband, apparently, is buying a house and cannot obtain mortgage approval due to the judgment. The original amount was approximately $31,000 and there is also a later judgment for child support arrears of $2,000. When I calculated the interest that accrued at 9% the amount of the payoff was approximately $46,000.

The delay in payment will cost the ex-husband 9% per year which is compounded each year so that for example after the first year he would owe $31,000 x 1.09 = $33,790 and after the second year it would be calculated as $33,790 x 1.09 = $36,831. Needless to say, the amount now due will be quite a shock to the ex-husband.

Often in cases with large child support arrears cases I have seen situations where the amount that is paid monthly toward the arrears does not even cover the interest. In such a situation, the amount owed is growing and not being reduced.

If you find yourself in such a situation with large arrears, sometimes a reduction in the amount owed will be considered if a lump sum payment is made or a significant down payment is made with an enforceable payment plan. Ideally, the best advice is to avoid the accumulation of arrears or other unpaid sums.

Steven P. Kuhn, Attorney at Law
Suffolk County Divorce Lawyer
Located at
5225 Route 347, Building 7, Suite 37
Port Jefferson Station, NY 11776.

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Phone: (631) 629-6874
Phone: (631) 928-7700

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