Postjudgement interest is the additional amount of money that a person must pay when they are on the losing end of a court case and owe money to the other party. It functions as a penalty for not making timely payments. The prevailing party in the case is entitled to collect this interest from the losing party until the full amount owed is paid. In federal court, there are established guidelines for determining the amount of interest that can be charged and when it begins accruing. The purpose of this interest is to compensate for the delay in receiving payment after winning a court case.
Postjudgement interest refers to the interest that the winning party, known as the creditor, can collect from the losing party, known as the debtor, from the time the court enters the judgement until the judgement is fully paid. For instance, if someone sues another person and is awarded $10,000, the losing party would be required to pay not only the $10,000 but also any postjudgement interest that has accumulated since the judgement was entered. In federal court, there are specific laws governing postjudgement interest for civil and bankruptcy cases. These laws allow creditors to collect interest on judgements owed to them for judgements rendered in a federal district court. The federal government also provides a set of applicable rates to determine the postjudgement interest on decisions made in federal court. For example, in the case of Van Asdale v. Int’l Game Tech., the 9th Circuit granted postjudgement interest on an award of back wages in a Sarbanes-Oxley whistleblower case. The court applied the postjudgement interest rate that is applicable to all civil cases in federal district courts as per 28 U.S.C. § 1961, rather than the interest rate for underpayment of federal taxes. Overall, postjudgement interest serves as a means for creditors to collect additional funds from debtors who owe them money after a court judgement has been entered. It is crucial for both parties to comprehend how postjudgement interest functions and how it can impact the total amount owed.
Postjudgment interest refers to the interest that accrues on a judgment debt after a court has rendered a final judgment. It is intended to compensate the prevailing party for the delay in receiving the awarded amount.
The postjudgment interest rate is typically determined by state law or federal law, depending on the jurisdiction. It may be a fixed rate or a variable rate based on market conditions.
Postjudgment interest usually starts accruing from the date of the final judgment. However, in some jurisdictions, it may start accruing from the date of the underlying contract breach or the date the lawsuit was filed.
In most cases, postjudgment interest is awarded automatically by law. However, it is important to check the specific rules and procedures of your jurisdiction to ensure compliance.
In certain circumstances, parties may agree to waive or reduce postjudgment interest through a settlement agreement or negotiation. However, such agreements must be voluntary and mutually agreed upon.
The compounding of postjudgment interest depends on the laws of the jurisdiction. Some jurisdictions allow for compounding, while others only allow simple interest calculations.
Postjudgment interest may be tax-deductible in certain situations. It is advisable to consult with a tax professional or attorney to determine the specific tax implications in your case.
In most cases, postjudgment interest can still be collected even if the judgment debtor files for bankruptcy. However, there may be certain limitations and procedures to follow, so it is recommended to consult with a bankruptcy attorney.
Postjudgment interest can generally be enforced against a deceased judgment debtor’s estate. However, the specific procedures and limitations may vary depending on the laws of the jurisdiction and the nature of the estate.
Postjudgment interest is typically awarded as a final judgment and may be difficult to modify or adjust once it has been granted. However, there may be exceptional circumstances where a court may consider modifying the interest rate, such as a mistake in calculation or a change in applicable laws. It is advisable to consult with an attorney to explore any potential options for modification.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 16th April 2024.
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