Skip to main content
Bernstein Burkley
  • Practice Areas
    • Overview
    • Bankruptcy & Restructuring
    • Business and Corporate Transactions
    • Creditors’ Rights
    • Litigation
    • Oil & Gas and Energy
    • Real Estate
  • Our Attorneys
  • About Us
    • Our Approach
    • History
    • Law Lists
    • Professional Memberships
    • Careers
  • Resources
    • Bernstein’s Dictionary of Bankruptcy Terminology
    • Links
    • Five Minute Legal Master videos
    • Blog
    • Legal Publications
  • News
    • Cases Archive
    • Firm News
    • In the News
    • Industry News
  • Contact
CALL - 412 456 8100
Connect
  • Facebook
  • Twitter
  • LinkedIn
Bernstein Burkley
  • Practice Areas
    • Overview
    • Bankruptcy & Restructuring
    • Business and Corporate Transactions
    • Creditors’ Rights
    • Litigation
    • Oil & Gas and Energy
    • Real Estate
  • Our Attorneys
  • About Us
    • Our Approach
    • History
    • Law Lists
    • Professional Memberships
    • Careers
  • Resources
    • Bernstein’s Dictionary of Bankruptcy Terminology
    • Links
    • Five Minute Legal Master videos
    • Blog
    • Legal Publications
  • News
    • Cases Archive
    • Firm News
    • In the News
    • Industry News
  • Contact
Blog
Blog

Post Judgment Interest: Are You Giving Money Away?

Posted on April 13, 2010 by Bob Bernstein

In a perfect world, a creditor would never have to file a lawsuit to collect on balances due and owing from debtors.  In a great world, any judgment obtained as a result of a lawsuit would immediately be paid by the judgment debtor.  In reality, creditors are often forced to sit on a judgment and hope that their judgment debtor either comes into some money or tries to sell a piece of real estate encumbered by their judgment lien.  This can take years. 

Does this judgment simply sit interest free?  If not, then what interest rate is applicable to the judgment?  The answer to the first question is easy.  Under Pennsylvania law, at a minimum, interest will acrue on the judgment at the rate of six percent per annum.  As a creditor you have the ability to determine whether that rate is higher or lower when contracting with your future debtor at the beginning of your relationship.  

 

Pennsylvania law provides that a plaintiff is entitled to interest on a judgment for a specific sum of money from the date of the verdict.  42 Pa.C.S.A. § 8101, (“Except as otherwise provided by another statute, a judgment for a specific sum of money shall bear interest at the lawful rate from the date of the verdict or award, or from the date of the judgment, if the judgment is not entered upon a verdict or award.”).  “Thus the general rule is that a plaintiff is entitled to interest on a judgment from the date of the verdict, and for purposes of computing interest, judgment and verdict are synonymous.” Osial v. Cook, 2002 PA Super 214, 803 A.2d 209, 215 (Pa. Super. 1994).

           

A plaintiff receives statutory post-judgment interest as a matter of right where the damages are ascertainable by computation. Pittsburgh Constr. Co. v. Griffith, 2003 PA Super 374 (Pa. Super. 2003).

 

Currently, the statutory rate of interest in the Commonwealth of Pennsylvania is fixed at six percent (6%) per annum, “but parties to a contract may agree to a higher rate.” Id; See, 41 P.S. § 202; In re Estate of Braun, 437 Pa. Super. 372, 650 A.2d 73, 78 (Pa. Super. 1994) (“the courts of this Commonwealth have found that the parties may agree to a post-judgment interest rate in excess of that provided by statute”); see, e.g., Miller v. City of Reading, 369 Pa. $71, 473-474, 87 A.2d 223, 226 (1952) (party who illegally fails to pay a debt is liable to pay interest thereon at the statutory rate unless the parties expressly agree otherwise); Smith v. Mitchell, 420 Pa. Super. at 144, 616 A.2d at 21 (Pa. Super. 1992) (quoting Daset Mining Corp. v. Industrial Fuels Corp., 326 Pa. Super. 14, 36, 473 A.2d 584, 595 (1984) and recognizing that in contracts concerning the payment of the sum of money at a rate higher or lower than the legal rate, they can agree to have the agreed upon interest rate continue after the debt becomes due; in the absence of an agreement, the interest rate fixed by law attaches); Cumberland Valley Cooperative Association v. Martin, 11 D.& C. 4th 10, 12 (C.C.P. Cumberland County 1991) (specific intent of the parties prevails over the statutory rate; parties’ agreement to pay post-judgment interest rate of 15% was upheld).

 

Therefore, if the parties’ agreement is silent as to interest or refers to “legal” or “lawful” interest, the judgment creditor is limited to six percent (6%) per annum in post-judgment interest.  However, where the parties’ agreement expressly provides for a higher interest rate and the plaintiff has plead this higher rate, Pennsylvania law allows for the imposition of post-judgment interest at the higher, agreed upon rate.  Once again, another example of why it is better to plan for the worst and hope for the best when entering into a creditor/debtor relationship.   

Share on:
  • Facebook
  • Twitter
  • LinkedIn

14 thoughts on “Post Judgment Interest: Are You Giving Money Away?”

  1. Bob Bernstein says:
    April 21, 2010 at 6:57 pm

    Shawn: Isn’t it surprising (and disappointing) how many credit sellers don’t make sure they are entitled to the highest possible interest rate and to collection expenses or attorney’s fees? They are so simple to fold into the contract. Thanks for the article.

    Reply
  2. joanne says:
    October 17, 2013 at 9:29 am

    Can the 6% interest be added to District Justice level judgments as well? I have been hunting for a law on this but havent been able to find one.

    Reply
    1. Shawn P. McClure says:
      October 22, 2013 at 10:43 am

      The easy solution is to immediately index the district magistrate judgment with your local court of common pleas after the thirty (30) day appeal period runs. That would eliminate any perceived distinction between a district magistrate judgment and a judgment entered in the court of common pleas. That being said, I am unaware of another statue that would impact district magistrate judgments. The statute uses the word judgment, so I believe interest accrues on the magistrate judgment.

      Reply
      1. Brian Jones says:
        April 4, 2015 at 10:25 am

        It is my understanding that any partial payments made on the judgment should be applied to costs and interest before they would reduce the principal amount of the judgment. I cannot find anything in the law that supports this. Is there anything?

        Reply
  3. Rick says:
    January 18, 2014 at 3:43 pm

    Is this interest applied as simple or compounded interest on a judgement not paid for…say five years?

    Reply
    1. Marissa Doyle says:
      February 18, 2014 at 10:22 am

      Hi Rick, this interest would be applied as simple interest on a judgement not paid for five years. Please let us know if you have any other questions. Thanks!

      Reply
    2. Robert Levi says:
      July 29, 2014 at 1:42 pm

      I am a Michigan attorney collecting a Pennsylvania judgment. I see the maximum lawful interest rate of 6% in Act No. 6 of 1974, enacted from SB 1255 on Wednesday Jan. 30, 1974. But I cannot find that law in the Penn. Consolidated Statutes. Can you give me a citation or a reason why it does not appear in the consolidated statutes? And what statute of case law provides that it is simple interest?

      Thanks, Robert Levi

      Reply
  4. w.jeffrey leonard says:
    March 11, 2014 at 4:02 pm

    Rick, is any special language required on a invoice or contract distinguishing pre or post judgment intrest

    Reply
    1. Marissa Doyle says:
      March 17, 2014 at 10:32 am

      Jeffrey,

      According to Shawn McClure: “No specific language. Language regarding contractual interest rate need only be clear and unambiguous, so that the intentions of the parties are clear to the court at a later date. The agreement to pay interest, pre or post judgment, should be in a writing signed by the parties.” Hope that helps. Please let us know if you have any other questions!

      Reply
  5. DiAnna says:
    May 1, 2014 at 9:27 pm

    If interest is not listed or mentioned in a district magistrate judgment and only a specific payment amount per month is listed, does the debtor still have to pay interest?

    Reply
  6. Kevin McGrath says:
    May 16, 2014 at 12:56 pm

    Does a plaintiff have an infinite amount of time to collect post-judgment interest, or is there some sort of limit?

    Reply
    1. Marissa Doyle says:
      May 16, 2014 at 2:37 pm

      Hi Kevin, according to Shawn McClure: Interest will accrue as long as the judgment is valid, which in PA is twenty (20) years.

      Reply
  7. Therese L says:
    June 15, 2014 at 8:50 pm

    A resulting judgment and lien now filed at the Carbon County Court House seems to do me (the plaintiff) no good. The process of a Writ of Execution for a sheriff sale was avoided because the debtor skipped the county and possibly State. He may even be traveling outside our domestic borders despite his social security status and failure to file state or federal taxes for many years.
    Needless to say, what bothers me most is his ability to flip cars around like kids do food at lunch. I thought a lien would hinder his ability to move around motor vehicle titles for profit and Getting insurance.

    Reply
  8. Therese L says:
    June 16, 2014 at 11:15 am

    After a judgment & lien does BMV or any credit bureau get notified by the court house?
    Is it safe to assume the 5 year renewal on the judgment attaches to the lien as well?

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

  • Dictionary of Credit Terminology
  • Bernstein’s Dictionary of Bankruptcy Terminology
  • Links
  • Five Minute Legal Master videos
  • Legal Publications
  • All Posts
  • Blog
  • Press Releases

Archives

Bernstein Burkley

Copyright © 2022 Bernstein-Burkley

best lawyers 2022lawyer of the year Harry Greenfield
ones to watch best lawyers 2022

 

Links
  • Disclaimer
  • Knowledge Base
  • Privacy Center
  • Site Map

Bernstein-Burkley, P.C.

Phone: 412.456.8100

Fax: 412.456.8135

Email: info@bernsteinlaw.com

Connect