On April 30, 2022, the interest rate on money judgments for consumer debt will be reduced from the standard judgment interest rate of 9% to 2%. This reduced interest rate will apply to all new money judgments on consumer debt that are entered after that date. It will also apply to any future interest that is due on any unpaid money judgments for consumer debt that have not been paid in full as of April 30, 2022.
The reduction in interest rate does not, however, retroactively reduce the interest rate on any unpaid judgment, nor does it entitle any judgment debtor to a credit or refund of any interest already paid. Rather, until April 30, 2022, the interest rate remains 9%.
As stated, this reduced interest rate applies only to consumer debt. A “consumer debt” is defined as “any obligation or alleged obligation of any natural person to pay money arising out of a transaction in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family or household purposes, whether or not such obligation has been reduced to judgment, including, but not limited to, a consumer credit transaction, as defined in” CPLR 105(f), which defines consumer credit transactions.
This Act also requires that any existing executions be reissued to the sheriff depicting the new interest rate, and when it is to begin. However, a judgment creditor does not lose priority by doing so. Judgment creditors are also required to reissue certain restraining notices with similar information. Additional requirements of the Act apply at the prejudgment stage when one is seeking judgment.