Illinois law, specifically 735 ILCS 5/2-1303, sets out the rules for interest on judgments, both before (prejudgment) and after (post-judgment) a court ruling. This guide explains key provisions so you can better understand your rights and obligations, whether you’re a plaintiff or a defendant.
1. Introduction
When a court decides that one party owes another a sum of money (a “judgment”), interest may accrue until the judgment is paid. This interest compensates the person owed money (the judgment creditor) for the time it takes to collect. It also incentivizes the judgment debtor to pay promptly.
Key Point: The rules vary depending on whether the judgment is for consumer debt, whether the debtor is a government entity, or whether the judgment is for personal injury or wrongful death.
2. General Post-Judgment Interest Rules
2.1 Standard Interest Rates
- 9% Per Annum: Applies to most court judgments.
- 6% Per Annum: Applies if the judgment debtor is a government entity, such as:
- A unit of local government
- A school district
- A community college district
- Any other governmental entity
2.2 When Interest Begins and Ends
- Interest typically starts on the date of the judgment and continues until the judgment is fully satisfied (paid off).
- If a partial payment is made, the outstanding principal will continue to accrue interest at the statutory rate.
2.3 Stopping the Accrual of Interest
A defendant can halt additional interest by tendering (offering to pay) the full amount of the judgment, plus any accrued interest and costs, even if they plan to appeal or take other legal steps.
3. Consumer Debt Judgments
3.1 Definition of Consumer Debt
“Consumer debt” refers to money owed by an individual that arose from transactions for personal, family, or household purposes.
3.2 Special Interest Rate for Consumer Debt Judgments
- 5% Per Annum: Applies to consumer debt judgments of $25,000 or less.
- This rate is lower than the standard 9%.
3.3 Exceptions
A consumer debt judgment does not include:
- Compensation for bodily injury or death
- Debts guaranteed by or shared with a business
3.4 Stopping Interest Accrual for Consumer Debts
Similar to other judgments, defendants can stop further interest by tendering the full amount, including any costs and accrued interest, as of the payment date.
4. Prejudgment Interest in Personal Injury and Wrongful Death Cases
4.1 When Prejudgment Interest Applies
Prejudgment interest can be awarded in lawsuits involving:
- Personal injury
- Wrongful death
This interest compensates the injured party for the time between the filing of the lawsuit and the final judgment.
4.2 Interest Rate and Accrual
- The rate is 6% per annum on damages (excluding punitive damages, statutory attorney’s fees, and certain costs).
- It generally starts the date the lawsuit is filed and can continue until the judgment is entered.
- Accrual is limited to 5 years.
4.3 Settlement Offers and Interest
If a defendant offers a settlement within 12 months after the suit is filed (or after the law went into effect) and the plaintiff rejects it:
- If the final judgment exceeds the amount of the highest written settlement offer, prejudgment interest applies only to the difference between the offer and the final judgment.
- If the judgment is equal to or less than the settlement offer, no prejudgment interest is added.
4.4 Government Entities
The state and local governments are not liable for prejudgment interest in personal injury or wrongful death actions brought directly against them.
5. Special Considerations for Government Entities
Judgments against government entities:
- Post-Judgment Interest is 6% (rather than 9%).
- Prejudgment Interest generally does not apply when the government is a defendant in personal injury or wrongful death claims.
6. Why This Law Matters
- For Plaintiffs: Understanding interest can ensure you receive fair compensation for the delay in payment.
- For Defendants: Knowing how interest is calculated—and how to stop it—can help you control costs.
Tip: Timely payment or making a valid tender for the judgment amount plus interest may save substantial future costs.
7. Conclusion
Interest on judgments can significantly affect the total amount owed or received in a lawsuit. Whether you’re dealing with consumer debt, personal injury, or a dispute involving a government entity, it’s crucial to understand these rules to protect your interests.
How Can Cronauer Law Help?
If you have questions about how interest on judgments might apply to your case—or if you need help pursuing or defending a claim—reach out to us at Cronauer Law. Our legal team can provide personalized guidance based on the facts of your situation.
This guide is for general informational purposes only and does not constitute legal advice. To discuss your specific circumstances, consult a licensed attorney.