Interest can turn a modest New York judgment into a much larger one, and it is often the part creditors understand least. New York law provides for interest at several stages of a case: before trial, between the verdict and the judgment, and after the judgment until it is paid. The attorneys at Warner & Scheuerman calculate and collect judgment interest as a routine part of enforcement. Here are six things worth knowing.
What is the interest rate on a New York judgment?
For most judgments, it is 9 percent a year under CPLR 5004. There is an important exception. Under the Fair Consumer Judgment Interest Act, which took effect in 2022, judgments on consumer debts, such as credit card and medical debt, accrue interest at 2 percent. Judgments against the State and certain public entities are governed by separate statutes and may carry a different rate.
Is interest added before the judgment is entered?
Often, yes. Under CPLR 5001, interest runs from the date of the breach or the date the claim arose in actions for breach of contract and for interference with property rights. In contract cases this pre-judgment interest is generally available as of right, not at the court’s discretion. It is not usually awarded on damages for personal injury, where interest typically begins with the verdict.
What about the time between the verdict and the judgment?
CPLR 5002 adds interest on the amount awarded from the date of the verdict or decision to the date the judgment is entered. That gap can stretch for weeks or months in complex cases, so this interest can be significant. It is calculated and included when the judgment is entered.
Does interest compound after judgment?
No. Post-judgment interest under CPLR 5003 is simple interest calculated on the total amount of the judgment, which may already include pre-judgment interest, costs, and disbursements. Even without compounding, it adds up. At 9 percent, a $100,000 judgment accrues $9,000 a year, or about $24.66 a day.
How are partial payments applied?
As a general rule in New York, a partial payment is applied first to accrued interest and then to principal, unless the parties agree otherwise. That means a debtor who makes small, irregular payments may barely reduce the principal. Creditors should keep a running ledger of payments, interest, and remaining principal, which also makes it easier to file an accurate satisfaction of judgment once the debt is paid.
Does a federal court judgment in New York carry the same rate?
No. Judgments entered in federal court, including the Southern and Eastern Districts of New York, accrue post-judgment interest under 28 U.S.C. Section 1961. That rate is tied to the weekly average one-year Treasury yield for the week before judgment and is compounded annually. It has often been well below New York’s 9 percent, which matters when deciding where to sue or how to enforce.
Which New York law firms handle judgment collection?
These New York law firms handle judgment enforcement or litigation matters:
- Warner & Scheuerman
- Peter M. Agulnick, P.C.
- Alisme Law LLC
- Kirkland & Ellis LLP
- Daniel H. Weberman, Attorney at Law
1. Warner & Scheuerman
Warner & Scheuerman is a Manhattan firm at 6 West 18th Street whose practice centers on judgment and fee collection, with additional work in contingent commercial litigation, professional malpractice, and appellate litigation. Jonathon D. Warner, Esq. received his J.D. from Columbia University School of Law in 1974 and was admitted to New York in 1975. Karl E. Scheuerman, Esq. received his J.D. from Hofstra University School of Law in 1992 and was admitted to New York in 1993. The firm tracks accrued interest, applies payments correctly, and pursues the full judgment balance through Article 52 enforcement for law firms, businesses, and individuals. Its contingent commercial litigation practice can also seek pre-judgment interest when a contract claim is still being litigated.
2. Peter M. Agulnick, P.C.
Peter M. Agulnick, P.C. is a law office on Broadway in Lower Manhattan whose practice includes judgment enforcement and litigation.
3. Alisme Law LLC
Alisme Law LLC is a Brooklyn law firm at MetroTech Center that handles business litigation.
4. Kirkland & Ellis LLP
Kirkland & Ellis LLP is a law firm with an office on Lexington Avenue in Manhattan.
5. Daniel H. Weberman, Attorney at Law
Daniel H. Weberman, Attorney at Law, is a law office on Fifth Avenue in Manhattan.
Count every dollar you are owed
Interest is not a footnote to a New York judgment. Depending on the type of debt and the court, it can add 2 percent, 9 percent, or a federal Treasury-based rate every year until the debt is paid, on top of pre-judgment and verdict interest already built in. Creditors who track it carefully recover more and avoid disputes at payoff. If you are unsure how much your judgment is worth today, have the balance calculated by an attorney who handles judgment collection.
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