Sometimes there is a delay between the time when a money judgment is entered in a civil case and when the winning party gets paid.  Under Wisconsin’s post-judgment interest statute, Wis. Stat. § 815.05(8), the judgment debtor must pay interest on the judgment at the statutory rate during this time period.  Similar statutes have been in effect in Wisconsin since at least 1858.  Over time, the interest rate has varied to provide fair compensation to persons who win civil law suits.

     One purpose of the post-judgment interest statute is to motivate the debtor to promptly pay the judgment.  For many years, the post-judgment interest statute demanded interest at the rate of 12% per year on the amount recovered from the date of entry of the judgment until it was paid.  Because the 12% interest rate far exceeded the prime rate, the statute provided a powerful motivation for immediate payment. 

     Effective December 2, 2011, the Wisconsin legislature dramatically lowered the post-judgment interest rate to only 1 percent, plus the prime rate.  The monthly prime rate value is currently about 4.25%.  Thus, the new legislation lowers the post-judgment interest rate to only 5.25%.   The purpose of the law is to limit the interest rate to the time value of money.  The law eliminates any penalty aspect, thereby reducing the judgment debtor’s motivation to immediately pay money judgments.  Instead of the civil judgment being the first debt paid, the judgment debtor will be able to consider whether not paying the judgment will result in a better return on investment for the judgment debtor.