Mississippi Senate Bill SB2398

Mississippi 2023 Regular Session

• Introduced: 1/16/23
• Refer: 1/16/23
• Failed: 1/31/23

Caption

Judgments; prohibit from bearing interest at a rate greater than 10 percent.

Impact

The enactment of SB2398 will significantly impact how courts handle judgments associated with contractual disputes and other legal matters. By instituting a uniform interest rate limit, the bill could create a more predictable legal environment for debtors and creditors alike. This consistency might encourage settlements and prompt more individuals and businesses to engage in transactions, knowing their potential liabilities will not escalate due to excessively high interest rates on unpaid judgments. However, it may also limit potential recoveries for some creditors who may rely on higher interest rates to account for risks associated with lending or contractual agreements.

Summary

Senate Bill 2398 aims to amend various sections of the Mississippi Code, specifically to implement a cap on interest rates for judgments. The bill amends Section 75-17-7 to prohibit judgments from bearing interest rates that exceed ten percent. This legislative change seeks to establish clearer limitations on the amounts that can accrue from judgments or decrees, ensuring a fairer treatment of those obligated to pay judgments and potentially easing the financial burden on individuals and businesses involved in legal disputes. Additionally, it aligns other related sections of the Mississippi Code to conform with this new interest rate cap.

Contention

One notable point of contention surrounding SB2398 is its potential to affect creditors' rights and interests in judgment recoveries. Opponents may argue that capping interest rates could disincentivize lending, as lenders might view this limitation as a loss of potential income from loans. Critics are concerned that limiting interest rates could undermine contractual agreements that allow for higher interest rates in cases where risks are deemed significant, thereby challenging fundamental principles of free market practices. Balancing the protection of debtors with the rights of creditors will be crucial as the bill progresses through the legislative process.