Prior to the enactment of Public Chapter No. 1043, the "default" interest rate on judgments was 10% per annum, pursuant to Tenn. Code Ann. § 47-14-121. Effective July 1, 2012, the interest rate applicable to judgments will be based on the prime rate, minus 2%, unless there is a statute, note or contract that fixes the rate of interest at a specific rate. Of course, the rate set by a note or contract cannot exceed the maximum rates permitted by Tenn. Code Ann. § 47-14-103 and the maximum "default" rate is 10%.
As long as low interest rates prevail, accruing post judgment interest will not be a significant concern for judgment debtors who are considering appeal. The Tennessee Administrative Office of the Courts will post rates on its website and the applicable rate will be based on the date of the judgment.
Given current prime rates, the post judgment rate announced in July should be approximately 1.5%.
Dan Berexa
Nashville, Tennessee
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