COMMITTEE SUBSTITUTE

FOR

H. B. 2774


(By Delegates Trump, Riggs, Amores, Faircloth and Staton)

(Originating in the House Committee on the Judiciary)

[February 28, 1995]



A BILL to amend and reenact article two, chapter forty-eight of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new section, designated section thirty-seven; and to amend and reenact article one, chapter forty-eight-a of said code, by adding thereto a new section, designated section three-a, all relating to interest on unpaid installments on obligations arising from domestic relations matters.

Be it enacted by the Legislature of West Virginia:
That article two, chapter forty-eight of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new section, designated section thirty- seven; and that article one, chapter forty-eight-a of said code be amended by adding thereto a new section, designated section three- a, all to read as follows:
CHAPTER 48. DOMESTIC RELATIONS.

ARTICLE 2. DIVORCE, ANNULMENT AND SEPARATE MAINTAINENCE.
§48-2-37. Calculation of interest.
If an obligation to pay interest arises under this chapter and the rate is not specified, the rate is that specified in section thirty-one, article six, chapter fifty-six of this code. On or after the effective date of this section, interest shall accrue only upon the outstanding principal of such obligation. This section shall be construed to permit the accumulation of simple interest, and may not be construed to permit the compounding of interest. Interest which has accrued on unpaid installments accruing before the effective date of this section may not be modified by any court, irrespective of whether such installment accrued simple or compound interest: Provided, That unpaid installments upon which interest was compounded before the effective date of this section shall accrue only simple interest thereon on and after the effective date of this section.
CHAPTER 48A. ENFORCEMENT OF FAMILY OBLIGATIONS.

ARTICLE 1. GENERAL PROVISIONS.

§48A-1-3a. Calculation of interest.
(a) If an obligation to pay interest arises under this chapter and the rate is not specified, the rate is that specified in section thirty-one, article six, chapter fifty-six of this code. Interest shall accrue only upon the outstanding principal of such obligation. On and after the effective date of this section, this section shall be construed to permit the accumulation of simple interest, and may not be construed to permit the compounding of interest. Interest which has accrued on unpaid installments accruing before the effective date of this section may not be modified by any court, irrespective of whether such installment accrued simple or compound interest: Provided, That unpaid installments upon which interest was compounded before the effective date of this section shall accrue only simple interest thereon on and after the effective date of this section.
(b) For the purposes of this chapter, the term "support" may not be construed to permit the compounding of interest accruing ln support arrearages.


NOTE: The purpose of this bill is to clarify that interest which accrues on obligations arising out of domestic relations matters accrues at the statutory rate unless otherwise prescribed by law. In addition, the bill clarifies that the interest which accrues shall be simple, not compound, interest.