Small Claim's Calculating Intrest CCP

[AgentSmithers]

What is the name of your state (only U.S. law)? California
Once a Judgement is entered we have a 10% APR interest rate that gets applied to the unpaid amount. Does anyone know what CCP covers calculation of the APR? I even tried to find a legal guideline for credit card companies and on reflex, you would think the example they give on the court's website is valid, You take 10% of the total amount of the loan and break it down by 365 days and that's your interest rate per day. As I see that is a simple example, is that really truley correct? That would be to say that the interest rate does not change throughout the year as more and more intrest accruse while the Judgement remains unpaid. For example if the Interest from 1day get's rolled into the 10% APR for day two that would create a drasiticly large difference at the end of the year and may closly mimic the correct rate that Credit Card interest is charged? Maybe my question is at what Interval does the interest rate refresh at and does the CCP even cover's this topic?
-Agent

 

[Zigner]

What is the name of your state (only U.S. law)? California
Once a Judgement is entered we have a 10% APR intrest rate that gets applied to the unpaid amount. Does anyone know what CCP covers calculation of the APR? I even tried to find a legal guideline for credit card companies and on reflex, you would think the example they give on the court's website is valid, You take 10% of the total amount of the loan and break it down by 365 days and that's your intrest rate per day. As I see that is a simple example, is that really truley correct? That would be to say that the interest rate does not change throughout the year as more and more intrest accruse while the Judgement remains unpaid. For example if the Interest from 1day get's rolled into the 10% APR for day two that would create a drasiticly large difference at the end of the year and may closly mimic the correct rate that Credit Card intrest is charged? Maybe my question is at what Interval does the intrest rate refresh at and does the CCP even cover's this topic?
-Agent

https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=685.010.&lawCode=CCP

CODE OF CIVIL PROCEDURE - CCP
PART 2. OF CIVIL ACTIONS [307 - 1062.20] ( Part 2 enacted 1872. )
TITLE 9. ENFORCEMENT OF JUDGMENTS [680.010 - 724.260] ( Title 9 repealed and added by Stats. 1982, Ch. 1364, Sec. 2. )
DIVISION 1. DEFINITIONS AND GENERAL PROVISIONS [680.010 - 694.090] ( Division 1 added by Stats. 1982, Ch. 1364, Sec. 2. )

CHAPTER 5. Interest and Costs [685.010 - 685.110] ( Chapter 5 added by Stats. 1982, Ch. 1364, Sec. 2. )

685.010.
(a) Interest accrues at the rate of 10 percent per annum on the principal amount of a money judgment remaining unsatisfied.

(b) The Legislature reserves the right to change the rate of interest provided in subdivision (a) at any time to a rate of less than 10 percent per annum, regardless of the date of entry of the judgment or the date any obligation upon which the judgment is based was incurred. A change in the rate of interest may be made applicable only to the interest that accrues after the operative date of the statute that changes the rate.

(Repealed and added by Stats. 1982, Ch. 1364, Sec. 2. Operative July 1, 1983, by Sec. 3 of Ch. 1364.)

 

[Zigner]

( it isn't 10% APR, it's 10% per annum)

 

[AgentSmithers]

( it isn't 10% APR, it's 10% per annum)

Thanks for the prompt reply Zinger.

Even when calculating per annum, Isn't an interval basis needing to be applied? Like for example Monthly?


SRC: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=685.010.&lawCode=CCP

"After 145 days, $237.80 (145 days x $1.64/day) of interest will have accrued on the $6,000 judgment. Out of the debtor’s $1,200 payment, pay yourself the accrued interest first. You then will have $962.20 left ($1,200 - $237.80 = $962.20). Now credit the remaining $962.20 against the $6,000 judgment ($6,000 - $962.20 = $5,037.80 of unpaid principal). The new daily interest will then accrue at a rate of $1.38/day ($5037.80 x 10% = $503.78 ÷ 365)."

It seems like the court's example shows the intrest refreshing daily and being triggers on the new value when being paid? however if not being paid when the intrest value stay's static. Thank's for the claification.

 

[Zigner]

Thanks for the prompt reply Zinger.

You're welcome. Please note that the interest appears to only apply to the unpaid judgment amount. You don't use any accumulated interest when calculating interest (does that make sense?)

 

[PayrollHRGuy]

Thanks for the prompt reply Zinger.

Even when calculating per annum, Isn't an interval basis needing to be applied? Like for example Monthly?

It is annual. 10%/12 mo = 0.83333% per month. 10%/356 = .02739%

 

[AgentSmithers]

You're welcome. Please note that the interest appears to only apply to the unpaid judgment amount. You don't use any accumulated interest when calculating interest (does that make sense?)

That make's perfect sense assuming that's correct because that removes the snowball effect that gets generated with I=PRT.