Fundamentals · Lesson 4 · 5 min
Interest Accrual on Judgments
Statutory and contract interest — how a judgment grows in value over time, and where it does not.
Overview
Most states impose a statutory post-judgment interest rate. Some allow the underlying contract rate to continue.
Interest is part of recovery value. It is also part of the carrying calculus for whether to renew, sell, or write off.
Interest must be properly calculated and supported when payoffs or settlements are negotiated.
Key Concepts
- • Simple vs. compound post-judgment interest (by state)
- • Contract rate vs. statutory rate
- • Per-diem interest in payoff letters
- • Interest in partial-payment scenarios
Examples
Per-diem discipline
A creditor with a $300K judgment at a 10% statutory rate accrues roughly $82/day. Over 24 months, that is meaningful additional recovery — if properly tracked.
Common Mistakes
- • Settling without re-running interest to the settlement date.
- • Applying the wrong rate after domestication into a new state.
- • Forgetting interest when valuing a judgment portfolio for sale.
Recommended Resources
- • State Post-Judgment Interest Reference
Educational only. Not legal advice. Judgment enforcement varies by state — consult licensed counsel.