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Accrual of Judgment Interest in Florida

By Robert D. Hiday

For many years there has been a controversy in Florida regarding how interest accrues on judgments once they have been entered. Pursuant to Florida Statute 55.03(1), the Comptroller of the state of Florida is required to announce the new judgment interest rate in effect as of January 1 of each year. The problem is that until recently, Chapter 55 did not indicate how the judgment was to apply from one year to the next. Some Courts took the position that the interest rate in effect at the time the judgment was entered was the operative rate that should be charged until the judgment was satisfied, while others felt that the rate should change each year as promulgated by the Comptrollers office. That controversy has been settled by the implementation of Section 55.03(3), Florida Statutes, which states: "The interest rate established at the time a judgment is obtained shall remain the same until the judgment is paid." Therefore, there is no longer any question about it, the final judgment interest rate will remain the same on all judgments which are entered this year until they are paid in full. See the historical interest rate chart to see how it has changed over the years.

Another related topic concerns whether the Courts will allow a creditor to use it's contractual rate in place of the statutory rate that is set as indicated above. In other words, if the statute for this year is at 9% but you have a contract with the debtor that calls for 18% interest, can you have the Court enter a judgment that accrues interest at the higher rate? This controversy was settled. In the case of Whitehurst vs. Camp, 699 So. 2d 679; 1997 Fla. LEXIS 1355; 22 Fla. L. Weekly S 527 (Fla 1997). In that case the Florida Supreme Court held that the note held by the creditor merges with the judgment and therefore cannot be the controlling instrument. In other words, the interest rate to be used on the judgment is that set by Chapter 55, not the promissory note. The only exception to this rule is where the note has a specific rate of interest that is to be applied in the event a judgment is entered. In that case, where the parties agreed in advance to the judgment interest rate, the Court would allow the higher rate.

NOTE: In December, 2003, the Comptroller announced that the statutory rate would be increased to 7%, effective 1/1/2004.

If you wish more information about the issues above, feel free to contact us.

Historical Judgment Interest Rates

YEAR	PER ANNUM
2008	11%
2007	11%
2006	9%
2005	7%
2004	7%
2003	6%
2002	9%
2001	11%
2000	10%
1999	10%
1998	10%
1997	10%
1996	10%
1995	8%

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