The Court interest rate changes every six months. This is the interest rate that creditors can charge debtors, when issuing legal proceedings, in the absence of an agreed or contractual interest rate between the parties. If the amount owed is less than $1,000, then up until there is a judgment, no interest can be claimed. Where the debt is over $1,000 the interest rate as at 1 January 2011 is 8.75% per annum.
When considering legal proceedings where there is no agreed or contractual interest rate, it is good practice to warn the debtor that in the event of legal proceedings, the court interest rate will apply.
Where there is a judgment in place, the interest rate is 10.75% per annum.