The vast majority of judgments obtained in small claims courts throughout the country are in favor of credit card companies, payday lenders, auto finance companies, banks and other lenders against consumers, and many of these judgments are obtained through the “default” mechanisms in place. A default judgment occurs where the defendant, typically a consumer, does not appear or otherwise file an answer to deny the claim against him or her. Many of these are the result of a consumer never even knowing that he or she was sued and has to appear or answer. The Wisconsin Legislature, on May 19, 2015, introduced a bill that, if passed, will hike up the interest rate on judgements obtained in small claims from the current rate of 1% above prime rate, to 12%. Just seven days later, the Assembly held a pubic hearing.
This hike is anti-consumer because it will mostly affect consumers who in most cases don’t have the money to pay. This “post judgment” interest rate will cause a $1,000 judgment to grow $120 every year, just compounding the financial problems a consumer already faces. It benefits the various financial institutions because it permits them to recover a much higher amount against the consumer than it would under existing law.
The following representatives introduced the bill: Kremer, Horlacher, Brandtjen, R. Brooks, Jarchow and Knodl, cosponsored by Senators LeMahieu and Nass. Referred to Committee on Ways and Means.
To follow this bill and read its text here:
2015 Assembly Bill 226
The bill is also traveling in the Wisconsin Senate under SB76, introduced by Senators Nass, Wanggaard and LeMahieu and co-sponsored by Representatives Thiesfeldt, Murtha, Edming, Murphy, T. Larson, Born, R. Brooks, E. Brooks, Kulp, Loudenbeck, Kahl, Czaja, Kooyenga, Ripp, Ballweg, Craig and Tittl. You can follow the Senate Bill here:
2015 Senate Bill 76