Short Answer:
Pre-judgment. The contract rate, or 6%.
Post-judgment. The contract rate, or 7.5%.
Explanation:
The Alabama Consumer Credit Act, Ala. Code §§ 5-19-1 et seq. ("Mini-Code"), does not specify maximum permitted pre-judgment or post-judgment rates. As a result, the creditor may impose the pre-judgment rate agreed to in the contract. If the contract does not specify a maximum permitted pre-judgment or post-judgment rate, the Usury Law controls.
Pre-judgment. The Interest and Usury Law, Ala. Code §§ 8-8-1 et seq. ("Usury Law"), provides that all contracts for the payment of money bear interest from the day the money should have been paid. Ala. Code § 8-8-8. If the contract does not specify a pre-judgment rate, the Usury Law sets the pre-judgment rate at 6% per year. Ala. Code § 8-8-1; Comeq, Inc. v. Mitternight Boiler Works, Inc., 456 So.2d 264 (Ala. 1984); Burgess Mining & Construction Corporation v. Lees, 440 So.2d 321 (Ala. 1983).
Post-judgment. The Usury Law provides that judgments bear interest from the day of the cause of action at the contract rate. If the contract does not specify a post-judgment rate, the maximum post-judgment rate is 7.5% per year. Ala. Code. § 8-8-10(a).
Last Revision*:
October 13, 2020 Show Redlined Changes
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