Creditor Entitled to Simple Interest on Defaulted Note Unless Parties Agreed to or Statute Allows Compounding

The Supreme Court of Ohio ruled 7-0 today that pursuant to R.C. 1343.02, when a debtor defaults on a written instrument that specifies an interest rate payable on the unpaid balance, and there is no agreement of the parties or another statutory provision expressly authorizing the compounding of interest, the creditor is entitled to simple interest on the unpaid amount until payment is made.

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