On New Year's Eve, Governor Hochul signed Senate Bill S5724A which amends the New York Civil Practice Law and Rules in relation to the rate of interest applicable to to money judgments arising out of consumer debt.
CPLR 5004 has been amended as follows:
Interest shall be at the rate of nine percent per annum... except 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 per annum (i) 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 (ii) 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. "
CPLR 3215(f) and (i) have been amended as follows:
Upon an application to the court for a judgment by default, the judgment now must include a statement, if applicable that, "the interest rate for consumer debt pursuant to CPLR 5004 applies."
CPLR 5222, 5230, and 5231 (property and wage executions/garnishments)
The form of the execution, whether a property or wage garnishment now must contain a statement, if applicable that, "the interest rate for consumer debt pursuant to CPLR 5004 applies."
If a property or income execution is ongoing, the attorney for the judgment creditor shall issue an amended execution within sixty days of the effective date of the chapter of the laws of two thousand twenty-one which amended this subdivision, effective as of the date of the rate change.
What is the effective date of the new law?
April 30, 2022.
Is the new law retroactive?
Yes. The new law applies to all judgments where a consumer is the defendant. Not only new judgments, but judgments that were entered before April 30, 2022 that still have an unpaid balance.
What about judgments satisfied prior to April 30, 2022?
The new law does not affect or create any rights or remedies related to any amounts paid prior to April 30, 2022. Judgment creditors or the sheriff will not be required to return or refund any amount lawfully collected from a judgment debtor prior to the effective date of the new law.
What happens next?
The bill is now part of New York State Law and will go into effect on April 30, 2022. The new law will be added to the laws of New York. It will be included in the annual periodical that contains the session laws (or "chapter laws") of the New York State Legislature. This law will be codified in the Consolidated Laws of New York.
