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Judgment Interest In New York Reduced From 9% To 2% For Consumer Debts

Consumer Debts Attorney In New York

Contact a consumer protection attorney if you or someone you know is dealing with a consumer debt lawsuit. Law Office of Simon Goldenberg, PLLC has ample experience dealing with consumer debt judgments and cases. Our attorneys will explain your legal options and provide insight on resolving your consumer debt issues. Contact Law Office of Simon Goldenberg, PLLC for a free consultation by calling 888-301-0584 or contacting us online.

According to, the American household debt hit a record high of $14.6 trillion in the spring of 2021. It was estimated that in 2021 the average American had $90,460 in debt, which included consumer debt products, credit cards, personal loans, mortgages, and student debt. For that reason, the amount of interest added to many debt people has been detrimental to whether the debt can be paid off and how fast it can be paid. So, if you are dealing with consumer debt or a judgment in New York, you may be thinking:

The Fair Consumer Judgment Interest Act

On December 31, 2021, Governor Kathy Hochul signed bill S5724.A/A.6474A, commonly known as the Fair Consumer Judgment Interest Act (FCJIA), into law. The Act modifies New York Civil Practice Law and Rules, applying to all consumer debts, including consumer credit transactions, lowering the interest rate from nine percent to two percent.

Consumer Debts Definition

Under FCJIA, consumer debt means any obligation a person pays to arise out of a transaction in which the money, property, insurance, or service was primarily for personal, family, or household purposes.

Consumer Credit Transaction

Under FCJIA, consumer credit transaction means any transaction where credit is given to an individual. The money, property, or service used for the credit was primarily for personal, family, or household purposes.

Effective Date Of The Fair Consumer Judgment Act

The Fair Consumer Judgment Interest Act went into effect on April 30, 2022, to aid low-income New Yorkers and those who were financially impacted by the pandemic.

Does The Fair Consumer Judgment Act Apply Retroactively?

The FCJIA applies to the judgment entered on or after April 30, 2022, and any unpaid portion of a judgment as of the effective date. For example, if a judgment was entered on April 1, 2022, but it had not been paid, the interest applies to the unpaid judgment.

What Judgments Does The Fair Consumer Judgment Act Affect?

For the purpose of the FCJIA, consumer debt is defined as any obligation or alleged obligation of a person primarily for personal, family, or household purposes. Examples of these types of potential judgments are:

  • Auto Loans
  • Mortgages
  • Student Loans
  • Medical Debt
  • Utility Bills
  • Internet Bills
  • Cell Phone Bills

What Is Judgment Interest?

In New York, interest is allowed on most judgments until it is fully satisfied. In the past, the interest rate was 9 percent per year or 0.75 percent per month. However, it has been reduced to 2 percent per year or 0.167 percent per month. As a result, if a judgment of $50,000 is entered against you and you do not pay anything for a year, by the year mark, the amount owed will be $51,000, whereas, before April 30, 2022, a person would have owed about $54,500.

Formula To Determine Judgment Interest

To calculate how much interest will be owed every day that the judgment goes unpaid, you can do the following math:

  • Judgment Amount: $100,000
  • Post Judgment Interest: 2 percent
  • Yearly Interest: $100,000 x 2% = $2,000
  • Daily Interest: $2,000/365 = $5.48

At this rate, if you do not pay the judgment until 55 days after the judgment was entered, the new amount due would be $100,301.40.

Hiring A Consumer Claims Lawyer

If you are involved in a consumer debt lawsuit, it is essential that you hire an experienced attorney to represent your rights. The attorneys at Law Office of Simon Goldenberg, PLLC are experienced consumer debt lawyers with a track record of success. To schedule a free consultation to discuss your case with one of our attorneys, contact us at 888-301-0584 or contact us online.