Post-judgment interest rates by state: what an unpaid judgment earns
Winning a lawsuit over an unpaid promissory note does not end the interest. Once the court enters a judgment, state law sets a rate that the unpaid balance earns until the borrower pays. Some states use a flat rate, some float with the market, and several recently cut the rate for consumer debts. In Texas, the rate in your note can carry into the judgment.
Rates in six jurisdictions
| Jurisdiction | Post-judgment rate |
|---|---|
| California (CCP 685.010) | 10 percent a year. For judgments entered or renewed on or after January 1, 2023: 5 percent on personal debt judgments under $50,000 against an individual, and on medical expense judgments under $200,000. |
| New York (CPLR 5004) | 9 percent a year, except 2 percent a year in an action on consumer debt where a natural person is the defendant. |
| Texas (Finance Code 304.002 and 304.003) | On a contract that provides for interest: the contract rate or 18 percent, whichever is less. Otherwise: the prime rate, but not less than 5 percent or more than 15 percent, set monthly by the consumer credit commissioner. |
| Florida (Fla. Stat. 55.03) | Set by the Chief Financial Officer each quarter: the average Federal Reserve Bank of New York discount rate for the prior 12 months plus 4 percentage points. |
| Illinois (735 ILCS 5/2-1303) | 9 percent a year, 6 percent against local government. Consumer debt judgments of $25,000 or less: 5 percent. |
| Federal courts (28 U.S.C. 1961) | The weekly average 1-year constant maturity Treasury yield for the calendar week before the judgment. |
The consumer debt carve-outs
The biggest recent change is lower rates for consumer debts. New York cut its rate on consumer debt judgments against individuals to 2 percent. California and Illinois lowered theirs to 5 percent for smaller consumer judgments. A personal loan to a friend or relative for household purposes may fall into these categories, because they are generally defined by the purpose of the debt, not by who the lender is. A loan to someone's business usually does not.
That means two lenders with identical $20,000 judgments can see very different growth. At 9 percent, simple interest adds $1,800 a year. At 2 percent, it adds $400.
Why Texas is different
Texas ties the judgment rate to the contract when the contract provides for interest. A note at 8 percent produces a judgment earning 8 percent, and no contract rate can push a judgment past the 18 percent cap. A note with no interest provision falls back to the prime-based rate. For Texas lenders, the interest clause keeps working after a lawsuit. Our guide to default interest explains how a higher rate after default interacts with usury limits.
How the interest is calculated
How the interest grows depends on the statute. Texas judgment interest compounds annually (Finance Code 304.006), and so does federal judgment interest, which is computed daily and compounded annually (28 U.S.C. 1961(b)). Other states generally charge simple interest on the unpaid amount from the date of judgment. Illinois's statute says interest is charged only on the unsatisfied portion of the judgment as it exists from time to time, so partial payments reduce what earns interest going forward. Keep a running ledger of every payment and the date it was received. Our guide to payment ledgers has a format that works.
What this means for collection
Judgment interest is one reason a judgment against someone who cannot pay today can still be worth having. A judgment can be renewed in many states, and the balance keeps growing at the statutory rate while you wait for a job, a bank account, or a house to appear. Our guide to collecting on a judgment walks through the tools, and small claims court is usually the first step for smaller notes.
Rates change. Texas and Florida publish new ones regularly, and legislatures revise flat rates. Check the current figure with the court clerk before calculating a payoff.