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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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Old 07-16-2014, 07:48 PM
Beachnana Beachnana is offline
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Default Interest on arrears? How do,you calculate it

So the SA carries a statement.

This order bears interest at the rate of three (3%) per year.

So the issue is non payment of section 7 expenses. Daycare.

How do we calculate the interest?

3% on the present outstanding amount? Probably not. He is 7 months in arrears. So Dec payment is 7 months overdue, Jan is 6 months overdue.

Do I,then compound the monthly interest? Its not a lot, its more sending a message that you have a legal obligation to pay daycare and it is not going away just by ignoring it, in fact like any debt it will increase.

.
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Old 07-16-2014, 08:11 PM
MS Mom MS Mom is offline
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Default

Quote:
Originally Posted by Beachnana View Post
So the SA carries a statement.

This order bears interest at the rate of three (3%) per year.

So the issue is non payment of section 7 expenses. Daycare.

How do we calculate the interest?

3% on the present outstanding amount? Probably not. He is 7 months in arrears. So Dec payment is 7 months overdue, Jan is 6 months overdue.

Do I,then compound the monthly interest? Its not a lot, its more sending a message that you have a legal obligation to pay daycare and it is not going away just by ignoring it, in fact like any debt it will increase.

.
Interest isn't compounded and is calculated monthly. I used a spreadsheet to calculate the interest.

The excel formula is:
=F3*G3*(H3/I3)
Where F3=amount in arrears
G3=interest rate
H3=Days late
I3=365 (a year)

Use the formula for each month's overdue amount. Add up each month's interest and that's the total interest due.

Does that help?
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Old 07-16-2014, 08:13 PM
Beachnana Beachnana is offline
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I think that is what I have done, so yes thanks.
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