As of January 1, 2014, the money judgment interest rate for the first half of 2014 will increase from 1.944% to 2.452%. A money judgment interest rate is a rate of interest applied to an award in litigation that presumably compensates the party for the losing party’s use of that money prior to payment.
In Michigan, the money judgment interest rate is governed by MCL 600.6013. This section provides that money judgment interest is to be calculated at six month intervals and that the interest rate is equal to 1% plus the average interest rate paid for 5 year U.S. treasury notes in the last six months.
Money judgment interest rates took a dive after 2008 dropping from 5.033% in January 2008 to 1.871% in July 2012. However, this month’s increase marks the third consecutive climb in the rate of money judgment interest. Despite the climb in recent calculations, interest rates are still far from the rates they had been (in June of 1989, money judgment interest rates were 10.105%). Despite the difference between the 2014 rate and the 1989 rate, money judgment interest can still have a large impact on the amount of money awarded and should be taken into account when considering the amount of money recoverable (or owed) in litigation.
Lisa Okasinski is a licensed attorney in the State of California. Please contact Demorest Law Firm if you would like more information about this topic.
