The Hiday Hotline ©

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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