Interest is the part of a judgment that grows while nothing else happens. A creditor who waits three years to enforce has lost time but gained roughly a quarter of the principal in accrued interest, provided the calculation was set up correctly at entry. It frequently is not. The attorneys at Warner & Scheuerman find that judgments arrive with the wrong rate applied, the wrong accrual date, or interest that was never carried forward into the execution, and each of those errors costs the creditor money that the statute already awarded.
What is the statutory rate of post-judgment interest in New York?
CPLR 5004(a) sets interest at nine percent per annum, which applies to money judgments generally unless another rate is provided by statute.
Nine percent is simple interest, not compound. New York does not compound post-judgment interest, so a $500,000 judgment accrues $45,000 per year regardless of how long it remains unpaid, and the accrued interest does not itself begin earning interest.
The rate is fixed by statute rather than tied to a market index, which is why it has stood well above prevailing borrowing costs for much of the past two decades and well below them in others. Its persistence at nine percent is the reason a stale judgment against a solvent debtor can be worth pursuing years later.
What changed with the 2% rate for consumer debt judgments?
The Fair Consumer Judgment Interest Act, signed in 2021 and effective April 30, 2022, added CPLR 5004(b), which sets post-judgment interest at two percent per annum on money judgments arising out of consumer debt.
Consumer debt is defined for this purpose as debt incurred by a natural person primarily for personal, family, or household purposes. Medical debt, credit card balances, retail installment obligations, and consumer loans fall within it. Judgments arising from business obligations, commercial contracts, guarantees signed in a business capacity, and most tort claims remain at nine percent.
The amendment applies to judgments entered on or after the effective date and, by its terms, to interest accruing on or after that date on judgments already entered, which means older consumer judgments carry nine percent for the earlier period and two percent afterward. Splitting the calculation at the effective date is a step creditors handling legacy consumer portfolios miss regularly.
When does interest start running?
Two different accrual periods sit inside a single judgment, and conflating them is the most common calculation error.
Prejudgment interest under CPLR 5001 and 5002 runs from the date the cause of action accrued, or from a single reasonable intermediate date the court fixes, through the date of the verdict, report, or decision. That interest is computed and added to the principal, and CPLR 5002 makes it part of the total sum awarded.
Post-judgment interest under CPLR 5003 then runs on the total, from the date of entry of judgment until it is paid. Because prejudgment interest is folded into the base, post-judgment interest accrues on principal plus prejudgment interest plus costs, not on principal alone.
Contract claims carry prejudgment interest as of right. In personal injury and wrongful death actions the rules differ, and CPLR 5002 interest from verdict to judgment is available even where prejudgment interest is not.
Where do creditors most often get the number wrong?
The recurring errors are arithmetic and procedural rather than conceptual.
- Applying nine percent to a consumer debt judgment entered after April 30, 2022, or applying two percent to a commercial obligation because the debtor is an individual.
- Computing interest on principal only, ignoring the prejudgment interest and costs that CPLR 5002 rolled into the judgment sum.
- Using the verdict date rather than the entry date for post-judgment accrual.
- Failing to update the amount due when preparing an execution, so the sheriff or marshal collects a stale figure and the balance survives the levy.
- Misapplying partial payments. Payments are generally applied to accrued interest first, then to principal, which changes every subsequent daily accrual.
- Ignoring a contractual rate. Where the underlying agreement specifies a rate, courts have applied the contract rate post-judgment where the parties clearly intended it to survive merger of the claim into the judgment.
An appeal does not stop the clock. Interest continues to accrue while an appeal is pending, and a defendant who posts an undertaking under CPLR 5519 stays enforcement without stopping accrual.
How does the Warner & Scheuerman approach use interest as leverage?
By quantifying it precisely and putting the number in front of the debtor. A per diem calculation, stated on the demand and updated in every communication, changes the tone of settlement discussions. On a $750,000 commercial judgment at nine percent, the daily accrual is roughly $185, which is a figure debtors respond to in a way they do not respond to an annual percentage.
Interest also reshapes the economics of enforcement spending. A receivership or turnover proceeding that takes eighteen months to produce payment still leaves the creditor whole on the delay, which supports pursuing remedies that would look uneconomical against a static balance.
Maintaining a running ledger matters for another reason. When a debtor eventually sells property or refinances, the title company will demand a payoff figure on short notice, and a creditor who cannot produce a defensible calculation risks accepting less than the judgment is worth.
Interest is awarded automatically but collected only if it is tracked. Confirm the rate, fix the accrual date, and recompute before every execution. Warner & Scheuerman represents judgment creditors in New York post-judgment enforcement, including payoff calculations, interest disputes, and collection strategy on aging judgments. Contact the firm through wslaw.nyc to review what your judgment is actually worth today.
