Colorado § 14-14-106 - Interest.

§ 14-14-106. Interest.

(1) (a) Interest per annum at four percent greater than the statutory rate set forth in section 5-12-101 on any arrearages and child support debt due and owing before July 1, 2021, may be compounded monthly and may be collected by the judgment creditor; however, such interest may be waived by the judgment creditor and such creditor is not required to maintain interest balance due accounts. After July 1, 2021, interest on child support arrearages and child support debt accrues at the interest rate specified in subsection (1)(b) of this section.

(b) Interest per annum at two percent greater than the statutory rate set forth in section 5-12-101 on any arrearages and child support debt due and owing on and after July 1, 2021, may be compounded annually and may be collected by the judgment creditor; except that such interest may be waived by the judgment creditor and such creditor is not required to maintain interest balance due accounts.

(2) If the judgment creditor seeks interest on child support arrearages as set forth in subsection (1) of this section, the debtor obligor may apply to the court to request that the court find good cause to use discretion in disallowing the calculated interest, or a portion thereof, on child support arrearages. In so doing, the court shall consider but is not limited to the following:

(a) Whether good cause existed for the nonpayment of the child support;

(b) Whether payment of the interest would result in undue hardship or substantial injustice for the obligor owing the interest; and

(c) Whether the disallowance or reduction of interest would result in undue hardship and substantial injustice to the person to whom the interest is owed.

(3) The court may determine an equitable period of repayment of any interest and arrears owed, if applicable, as set forth in this section.

Source: L. 81: Entire article added, p. 908, § 1, effective June 8. L. 86: Entire section amended, p. 725, § 5, effective July 1. L. 88: Entire section amended, p. 633, § 9, effective July 1. L. 94: Entire section amended, p. 1539, § 8, effective May 31. L. 97: Entire section amended, p. 1241, § 39, effective July 1. L. 2003: Entire section amended, p. 1266, § 53, effective July 1. L. 2021: Entire section amended, (HB 21-1220), ch. 212, p. 1120, § 3, effective July 1.

Cross references: For the statutory rate of interest, see § 5-12-102.

ANNOTATION

Law reviews. For article, "An Update of Appendices from Collecting Pre-and Past-judgment Interest in Colorado", see 15 Colo. Law. 990 (1986).

Interest on child support judgment. Trial court is without discretion to deny interest. Therefore, interest on child support arrearages accruing from the date each installment became due shall be included in the judgment. In re Schutte, 721 P.2d 160 (Colo. App. 1986).

This section is applicable only for support past due and unpaid by an obligor and not available against the Denver department of social services for amounts collected from obligor which the court ordered paid to ex-wife. People in Interest of D.C., 797 P.2d 840 (Colo. App. 1990).

This section does not apply to retroactive modification of support, since debt is not mature until after entry of order. In re Schutte, 721 P.2d 16 (Colo. App. 1986); In re Armit, 878 P.2d 101 (Colo. App. 1994).

Court does not have discretion as to amount of interest or whether interest is compounded monthly. Statute vests in the judgment creditor the option to collect the increased rate, to compound the interest monthly, and to waive the interest. In re Tognoni, 313 P.3d 655 (Colo. App. 2011).

Laches may be asserted as a defense to a claim for interest on child support arrearages. Although laches may not be asserted against the principal amount of the child support debt, laches may bar recovery of interest if the three elements of laches are met: (1) full knowledge of the facts by the party against whom the defense is asserted; (2) unreasonable delay by the party against whom the defense is asserted in pursuing an available remedy; and (3) intervening reliance by and prejudice to the party asserting the defense. In re Johnson, 2016 CO 67, 380 P.3d 150.