Interest on civil debt

The Interest on Money Claims Act 2016 has changed the process for being awarded interest by the court and claiming interest on a judgment debt from 1 January 2018.

  • Only cases commenced from 1 January 2018 can be awarded interest under the new Act.
  • If you started your case in the District Court before 1 January 2018, sections 62B and 65A of the District Courts Act 1947 will still apply
  • If you started your case in the High Court before 1 January 2018, the old section of the Judicature Act 1908, section 87 will still apply.

Please note: an application to vary an attachment order is not a new enforcement application.

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Interest calculated for cases started prior to 1 January 2018

When you make a new enforcement application to the court, you can ask to be paid interest on civil debt more than $3000.

If you started your claim for a judgement order prior to 1 January 2018, you can continue to claim interest under sections 62B and 65A of the District Courts Act 1947 until the debt has been paid in full.

Please note: an application to vary an attachment order is not a new enforcement application.

Interest on civil debt is calculated differently after a judgment order has been granted

After a judgment order, interest on civil debt is:

  • calculated at 5% a year on orders made on or after 11 July 2011
  • accumulated monthly
  • added in retrospect when a creditor applies for enforcement action.

You as creditor can claim:

  • simple interest on the debt, not compound interest
  • interest on the whole debt, accounting for payments already received from the debtor
  • interest on the debt only, not on fees or other costs the debtor has to pay.

Your right to claim interest on civil debt is governed by section 65A of the District Courts Act 1947(external link)

Calculate the interest and add it to your civil debt application

To calculate the amount of interest you can claim on a civil debt, you need to:

  • identify the total civil debt amount stated in your judgment order
  • calculate 5% per year on the amount.

To claim this amount of interest on civil debt, you can either:

  • write the interest amount on the new enforcement application form
  • ask at the financial assessment hearing for the interest to be added to the debt.

If you want help calculating the interest, or your judgment order is older than 1 July 2011, you can:

Please note: an application to vary an attachment order is not a new enforcement application.

Interest calculated for cases started after 1 January 2018

The ability to claim interest is now awarded in a money judgement and can be liable to be paid from the date specified by the court, up until the debt is paid in full.

Your right to claim interest is governed by the Interest on Money Claims Act 2016 (external link).(external link)

What is the initial amount?

The court will set the initial debt amount. This is the amount specified by the court in a money judgement, and is the amount against which interest can be claimed for the defined period.

When using the Civil Debt Interest Calculator, this is the amount you will enter as the initial amount.

Please note: interest cannot be claimed on costs or interest awarded after the judgement has been made, such as the cost of filing enforcement applications.

What is the start date?

When the court is defining a period or periods to award interest on, the start date is the date from which interest begins accruing. This will be either:

  • The day on which the ‘cause for action’ (the source of the claim) began which the court will state in the money judgement; or
  • A later date which the court will state in the money judgement.

When using the Civil Debt Interest Calculator, this is the start date you will enter into the calculator.

What is the end date?

The interest awarded accrues until the judgment debt has been paid in full. When using the Civil Debt Interest Calculator, the end date will be:

  • If the debtor (the person or persons ordered to pay the debt) is making payment in full, the end date is the date of payment; or
  • If you are filing an enforcement application, the end date is the date you are completing the application; or
  • If the court has specified in the money judgement one or more shorter periods for interest is to be awarded, the end date of each of those periods. Interest must be calculated separately for each period.

Please note: each time you file an enforcement application you can provide the updated amount of interest owing. An application to vary an attachment order is not a new enforcement application.

What are instalments?

You must include any payments made towards the judgement debt when calculating the amount of interest that can be claimed.

If the debtor pays or intends to pay the judgement debt in one payment, you do not need to enter anything in ‘instalments’, but you must enter the date of payment as the end date. This will calculate the total amount owing, including interest, for the debt to be paid in full.

If the debtor has made payments towards the judgement debt in instalments, you will need to enter each payment amount and the date it was made into the calculator using the add instalments button.

Once the judgement debt (including all interest claimed under the Interest on Money Claims Act 2016) is paid in full, no further interest can be claimed.

Civil Debt Interest Calculator for interest claimed or awarded from 1 January 2018

Calculating the interest on a money judgment made under the Interest on Money Claims Act 2016 can be done through accessing the Civil Debt Interest Calculator.

Frequently Asked Questions provide further details about the interest rate, how it is calculated and how it is applied to the debt.

You can request a spreadsheet version of the Civil Debt Calculator by emailing us at civilenforcement@justice.govt.nz

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