Determining a precise amount owed on a judgment is a vital part of the collection process. If the amount is incorrect, the court will not issue a writ of execution, which is required to levy on the debtor’s assets. And if the court accidentally issues the writ or levy for an incorrect amount, the debtor could seek to quash it.
Interest is the issue
The amount owed is straightforward enough, but the debtor also owes interest on the debt. There are two kinds of interest:
- Pre-judgment interest: The objective is to pay the plaintiff/creditor the total value of money for the debt.
- Post-judgment interest: This accrues between the time the plaintiff wins their lawsuit and the judgment is entered, to the time the creditor collects the sum.
California’s pre-judgment and post-judgment interest rates are 10% annually on the principal, but pending legislation most likely will impact these rates. Federal cases have different levels set to the weekly average of 1-year Treasury yield for the week that precedes the judgment.
There are many variables to address
Considering all the different sums owed, court costs, percentages and legal fees, it is smart to work with a collections attorney who practices here in California. They can determine the correct amount owed and provide various other services so the client can get the right amount of money owed to them.