RECENT CHANGES IN THE LAW AFFECTING
INTEREST ON JUDGMENTS FOR SUPPORT

Frequently asked question No. 1:
Is there any way I can get interest on past due Child Support?

Yes, you can (at least until July 1, 2006)! Once upon a time, it was thought that interest had to be reduced to judgment in Contempt and that a Superior Court Judge had discretion in awarding pre-Contempt Judgment interest. That was because a trilogy of cases evolved into an expression of opinion in the Supreme Court of Georgia (also viewed by the Bench and Bar as the spoken law of the land) holding that before interest could be recovered, it had to be determined in such a proceeding, and that the trial Judge was vested with discretion as to whether to order it paid or payable for periods preceding a contempt action.

Judgments accrue interest. Period. The problem causing inconsistency in the system was trying to get some agreement about when it was that an entitlement to support became a Judgment for support, and when did it require the acknowledgment of interest? In 1996, the Legislature addressed the confusion about whether to award interest

All awards of child support expressed in monetary amounts shall accrue interest at the rate of 12 percent per annum from the day such award or payment is due. This code section shall apply to all awards, court orders, decrees and judgments rendered pursuant to Title 19. It shall not be necessary for the party to whom child support is due to reduce any such award to judgment in order to recover such interest. That's O.C.G.A. 7-4-12.1

That's a pretty clear statute, using mandatory, inclusive language like "all Judgments" "all awards" and "shall".,but... it still did not address the question, in a way which was not subject to various interpretations, of when the obligated party became responsible for interest, hence reliance on the prior ruling about contempt hearings, etc. So, realizing that it had not been totally clear, the legislature in the 1997 session has declared what the law has always been, such declaration codified at O.C.G.A. 19-6-17 (e).

Any payment or installment of support under any child support order is, on or after the date due:
(1) A Judgment by operation of law, with full force and effect and attributes (emphasis supplied) of a Judgment of this state, including the ability to be enforced.

What are the attributes of a Judgment of this state (in case we lawyers have difficulty determining the meaning of "all Judgments" and "any payment")? One, since 1799, is that

All Judgments obtained in the Superior Courts...shall be of equal dignity and shall bind the property of the Defendant in Judgment, both real and personal, from the date of such Judgments... O.C.G.A. 19-12-80

Another such attribute, since 1845 (as amended in 1979), is that

All Judgments in this state shall bear interest upon the principal amount recovered at the rate of 12 percent per year...The postjudgment interest provided for in this code section shall apply automatically to all Judgments in this state and such interest shall be collectable as a part of each such Judgment whether or not such Judgment specifically reflects the entitlement to such interest. O.C.G.A. 7-4-12.

Then, creating mischief and the potential for real confusion and inconsistent application of the law, the legislature amended the interest statute in 2004 as follows:

7-4-12.1. Interest on arrearage on child support.
[THE TEXT OF THIS SECTION IS EFFECTIVE UNTIL JULY 1, 2006, SEE BELOW SECTION FOR TEXT EFFECTIVE JULY 1, 2006.]
All awards of child support expressed in monetary amounts shall accrue interest at the rate of 12 percent per annum commencing 30 days from the day such award or payment is due. This Code section shall apply to all awards, court orders, decrees, and judgments rendered pursuant to Title 19. It shall not be necessary for the party to whom the child support is due to reduce any such award to judgment in order to recover such interest.

(Code 1981, § 7-4-12.1, enacted by Ga. L. 1996, p. 649, § 1.)

7-4-12.1. Interest on arrearage on child support.
[THE TEXT OF THIS SECTION IS EFFECTIVE JULY 1, 2006, SEE ABOVE SECTION FOR TEXT EFFECTIVE UNTIL JULY 1, 2006.]

All awards of child support expressed in monetary amounts shall accrue interest at the rate of 7 percent per annum commencing 30 days from the day such award or payment is due. This Code section shall apply to all awards, court orders, decrees, and judgments rendered pursuant to Title 19. It shall not be necessary for the party to whom the child support is due to reduce any such award to judgment in order to recover such interest. The court shall have discretion in applying or waiving past due interest.

(Code 1981, § 7-4-12.1, enacted by Ga. L. 1996, p. 649, § 1; Ga. L. 2005, p. 224, § 3/HB 221.)

Now, it would seem that after July 1, 2006 the court may waive interest in a contempt proceeding but it should be collectible by other means, maybe. This is bad law, but whatever it is, it is the law.

Now and again, a Courts will look at the amount of interest that accrues while the derelict non-paying Defendant enjoys what is, in effect, an interest free loan at the expense of the struggling custodial parent and underprivileged child. Sometimes, particularly when support hasn't been paid for several years, that amount can be quite large. Questions would arise concerning whether it is fair to burden the obligated party with the requirement to pay interest if the amount seemed grossly disproportionate to the original obligation. The Courts themselves, not the legislature, deal with the concept of "fairness" thus

Legal interest rates are prima facie "equitable" and any award deviating from the legal rates must be based upon sufficient evidence demonstrating that another rate is appropriate. Atlantic States Constr., Inc. v. Beavers, 169 Ga. App. 584, 314 S.E. 2d. 245 (1984).

The Jaycees have a creed which says, in part, "Government should be of laws and not of men." The law now seems less clear in this matter. It is your law; it was enacted to help you. But, there appears to be some question whether there is an absolute right to interest on support Judgments. If so, it starts accruing on a payment the day the payment gets missed.

Frequently asked question no. 2:
Does the interest law apply to my 1990 Support Order?

In our opinion, it does. There will be an enterprising Defendant who will take a case to the Supreme Court regarding retroactive application of the statute, urging that "all Judgments" does not include Judgments that existed prior to the new statute. Statutes dealing with interest on Judgments have historically had retroactive application. More importantly, this is not "new" law, but a clearer statement of existing law. If you are owed support, this may benefit your children.

*Note: This letter is intended to serve only as a community awareness notice with respect to changes in the law which affect our friends and clients in the parenting community. Anyone concerned with how these changes will impact their individual family situation should consult their attorney.

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