New York passes legislation reducing interest rates on judgments involving consumer debt to two percent.
In response to the economic impact caused by the COVID-19 Pandemic, New York Governor Hochul signed into law Senate Bill S5724A also known as the New York Fair Consumer Judgment Interest Act. The Act amends the provisions of New York Civil Practice Law and Rules, also known as the CPLR, to reduce the amount of interest on judgments involving consumer debts against natural persons from 9% to 2%. The goal of the Act is to reduce hardships on individuals caused by the statutory judgment interest rate that has only intensified during the COVID-19 Pandemic.
What is Consumer Debt?
Consumer Debt is defined in the New York Fair Consumer Judgment Interest Act 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.” Examples of these types of obligations would be:
- Credit Card Debt
- Medical Debt
- Auto Loans
- Student Loans
- Utility Bills and
- Cell Phone Bills.
What is Statutory Judgment Interest?
Interest is allowed on almost all judgments entered in New York State Courts from the date of judgment until it is paid in full and satisfied. As such, when a consumer debt creditor wins a lawsuit against a debtor, the New York State Legislature authorized the creditor to collect additional interest on the judgment itself to compensate creditors for the cost of any delay in repayment by the debtor.
Does the New York Fair Consumer Judgment Interest Act only apply to existing judgments?
Even though the date that this New York Fair Consumer Judgment Interest Act becomes effective is April 30, 2022, the Act applies retroactively to consumer debt judgments entered before April 30, 2022, as long as the judgments themselves are not yet fully paid and satisfied.
What benefits does the New York Fair Consumer Judgment Interest Act give to consumers?
The New York Fair Consumer Judgment Interest Act will reduce mounting debt for countless individuals as they continue to try to pull themselves out of the economic turmoil that was caused by the COVID-19 Pandemic. Having a reduction in statutory judgment interest will allow individuals to pay off their outstanding debt quicker and move on to the next chapter of their lives.
The importance of hiring an Experienced Consumer Debt Defense Attorney:
Clair Gjertsen & Weathers PLLC are experienced consumer debt defense attorneys. We negotiate with debt collection law firms and remove holds on your bank accounts or garnishments on your wages. For additional questions regarding the consumer debt defense process, we invite you to contact Clair Gjertsen & Weathers PLLC by calling 914-472-6202. We look forward to hearing from you.