On April 30, 2022, CPLR 5004 was changed to reflect New York State’s new post-judgment interest rate for 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….”
The definition of “consumer credit transaction” is “a transaction wherein credit is extended to an individual and the money, property, or service which is the subject of the transaction is primarily for personal, family or household purposes.”
The specific language of CPLR 5004 states that the annual rate of interest to be paid in an action arising out of a consumer debt where a natural person is a defendant shall be two per centum (2%) per year
- on a judgment or accrued claim for judgments entered on or after the effective date of the chapter of the laws of two thousand twenty-one which amended this section, and
- for interest upon a judgment pursuant to section five thousand three of this article from the date of the entry of judgment on any part of a judgment entered before the effective date of the chapter of the laws of two thousand twenty-one which amended this section that is unpaid as of such effective date.
This change means that a property or wage garnishment will be required to contain a statement, if applicable that, “the interest rate for consumer debt pursuant to CPLR 5004 applies.”
If a property or income execution is already ongoing, the attorney for the judgment creditor is required to issue an amended execution within 60 days of the effective date of the rate change.
And perhaps most significant and impactful of all, these rate changes shall be applied to all judgments that have an unpaid balance where a consumer is the defendant.
The law does not affect or create any rights or remedies related to judgments paid prior to April 30, 2022 and judgment creditors will not be required to return or refund any amount lawfully collected from a judgment debtor prior to April 30, 2022.
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