California Court of Appeal

Forbearance fees agreed to by judgment debtors in exchange for judgment creditors' agreement to delay in executing on their judgments do not violate California's usury law, where: 1) the usury law does not expressly prohibit a party from entering into an agreement to forbear collecting on a judgment; 2) usury liability therefore does not extend to judgment creditors who receive remuneration beyond the statutory 10 percent interest rate in exchange for a delay in enforcing a judgment; but 3) the forbearance fee does not become a part of the judgment, and must be enforced in a separate contract action.

Appellate Information

• Decided 04/25/2014
• Published 04/25/2014

Judges

• McGUINESS

Court

• California Court of Appeal

Counsel