Winning the case and securing judgment are (rightly) on the minds of lawyers seeking to enforce money payment instruments. But matters of interest — what is allowed in a loan agreement (or otherwise), penalty interest, and how pre- and post-judgment interest is calculated — can have a big impact on the amount recovered. Litigants can end up inadvertently leaving a lot of money on the table and, especially in a low interest rate environment, policy choices can have important effects.
In two articles, we’ll explore some of the questions that arise when it comes to interest in New York City. Part one examines usury in New York and how it affects the drafting and enforceability of interest clauses in loan agreements. Part two will examine how interest is calculated from breach to judgment through collection, and how specific drafting choices in the loan agreement and strategic litigation choices can impact collection. Second part will also offer practical and strategic drafting advice.
Usury and penalty interest
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