Setting Default Interest Rates and Post-Judgment Interest Under Florida Law

Fla. Stat. § 55.03 sets a statutory interest rate for post-judgment interest in Florida. The interest rate set by statute is compensatory, but lower than both average consumer debt, and prevailing credit card rates for creditworthy individuals. Certainly, a judgment should carry a higher interest rate to incentivize the payment of such judgment by the judgment debtor — especially if the average judgment debtor is rational and therefore would pay its highest cost debt first. 

The statutory interest rate for post-judgment interest is the default rate applicable unless otherwise agreed by contract. See Jenkins v. Plaza 3000, Inc., 2014 Fla. App. LEXIS 1838 (Fla. 4th DCA Feb. 12, 2014).”The interest rate on all of the unpaid assessments was improperly charged in excess of the statutory rate; in the absence of an agreement, the statutory interest rate must be used, pursuant to Fla. Stat. §§ 687.01 and 55.03. ” However, the plain language of section 55.03 provides that  “nothing contained herein shall affect a rate of interest established by written contract or obligation.” This is consistent with public policy that allows for parties to freely contract.

Although Fla. Stat. § 55.03 allows the parties to a contract to set the rate of post-judgment interest, a contractual provision which sets only the rate of interest for the debt does not also govern the rate of post-judgment interest. To contractually set the interest rate applicable to a judgment of decree arising from a contract, the parties must expressly provide that the specified rate governs post-judgment interest. Whitehurst v. Camp, 699 So. 2d 679, 1997 Fla. LEXIS 1355 (Fla. 1997).

When drafting a default provision in a note, settlement agreement, or other written contract, fixing a post-judgment interest rate is another prudent method to protect the non-defaulting party and to discourage breach. Establishing an onerous post-judgment interest rate should compel contract compliance, and should be used in conjunction with prevailing party attorneys fee provisions to establish serious consequences in the case of breach.

What is the maximum amount of interest you can fix to post judgment interest? Florida law sets a maximum interest rate of 18% simple annual interest.

687.03 “Unlawful rates of interest” defined; proviso.—

(1) Except as provided herein, it shall be usury and unlawful for any person, or for any agent, officer, or other representative of any person, to reserve, charge, or take for any loan, advance of money, line of credit, forbearance to enforce the collection of any sum of money, or other obligation a rate of interest greater than the equivalent of 18 percent per annum simple interest, either directly or indirectly, by way of commission for advances, discounts, or exchange, or by any contract, contrivance, or device whatever whereby the debtor is required or obligated to pay a sum of money greater than the actual principal sum received, together with interest at the rate of the equivalent of 18 percent per annum simple interest. However, if any loan, advance of money, line of credit, forbearance to enforce the collection of a debt, or obligation exceeds $500,000 in amount or value, it shall not be usury or unlawful to reserve, charge, or take interest thereon unless the rate of interest exceeds the rate prescribed in s. 687.071. The provisions of this section shall not apply to sales of bonds in excess of $100 and mortgages securing the same, or money loaned on bonds.


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