I am often faced with paying late alimony, and I want to be sure that the interest calculations they are hitting me with are correct. Can Margill Law Edition help me out?
Question:
I am often faced with paying late alimony, and I want to be sure that the interest calculations they are hitting me with are correct. I pay 4% simple interest only on late or fractional payments. I am testing your software right now, and if I am say $500 short but pay it within 21 days the Recurring payments tell me that there is over $60 in interest, rather than the correct $1.15 ($500 late for 21 days at 4% simple annual interest). Is there another module I should be using for my application?
Answer:
You should be using the “Arrears” calculation (not rRecurring payments) and then you’ll get the $1.15…
With your example, 21 days late, you must enter the 500 alimony due on the 1st for example and then when you pay it, enter -500 on the 21st. So it keeps a running tab. You only enter the alimony missed or late, not if paid.
I don’t have your number of missed arrears but here’s an example. No missed arrears until July 1, 2020. Then Compute:
Results – nothing really intersting so far since I only have an amount due on July 1:
Then I add lines and a running balance continues.
In this example the July 1 amount is never paid but the September 1 amount is not paid on Sept 1 but on Sept 21.
I then started paying all my alimony and want to know the total amount owed today (Oct 20, 2021 at end of day). I added a line with a 0.00 payment:
If interest rates change, you can also change the rates…
You can even add irregular arrears before crating the scheule via Excel (if you have many).
Hope this helps
Marc Gelinas, Attorney, MBA