Judgment Interest in Texas Debt Cases

Collin, Dallas, Denton, Grayson And Surrounding Areas

 

How Post-Judgment Interest Can Make a Debt Judgment Grow—and How to Check Whether the Creditor’s Calculation Is Correct

Winning a judgment does not necessarily freeze a debt at the amount written on the day judgment is signed. Texas law generally allows post-judgment interest to accrue until a money judgment is satisfied. Over months or years, that interest can materially increase the amount a judgment creditor claims is due.

For consumers and business owners, this becomes especially important when an older judgment resurfaces, a creditor demands a payoff, a bank account is garnished, a judgment lien interferes with a real-estate closing, or a receiver begins collecting assets. A payoff that appears substantially higher than the original judgment may be partly explained by lawful post-judgment interest—but the creditor’s math should still be checked.

Texas judgment-interest law is governed primarily by Chapter 304 of the Texas Finance Code. The applicable rate can depend on whether the underlying contract itself provides for interest or a time-price differential, the date the judgment was rendered, and other statutory rules.

Ridgely Davis Law represents consumers and businesses throughout North Texas and Texas in debt litigation and post-judgment collection involving judgments, old judgments, bank garnishment, judgment liens, turnover orders, and judgment settlement.

If a creditor is demanding payment on a judgment, do not assume its payoff figure is correct simply because interest is legally allowed. The judgment, statutory rate, payment history, credits, and compounding should be reviewed.

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What Is Post-Judgment Interest?

Post-judgment interest is interest that accrues on a money judgment after the judgment is rendered and before it is satisfied.

Texas Finance Code Section 304.005 generally provides that post-judgment interest on a money judgment of a Texas court accrues beginning on the date the judgment is rendered and ending on the date it is satisfied, subject to statutory exceptions.

Section 304.006 provides that post-judgment interest compounds annually.

The official statute is available through the Texas Finance Code Chapter 304.

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What Is the Current Texas Post-Judgment Interest Rate?

For judgments governed by Texas Finance Code Section 304.003 rather than a contractual rate under Section 304.002, the Texas Office of Consumer Credit Commissioner publishes the applicable post-judgment interest rate.

For August 2026, the OCCC lists the Texas post-judgment interest rate as 6.75%.

That figure should not be blindly applied to every judgment. The relevant rate is generally determined by the law applicable when the judgment is rendered, and contracts providing their own interest rate can fall under a different provision.

The OCCC publishes the current and historical rates at its official Texas interest-rates page.

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How Is the Statutory Rate Calculated?

Texas Finance Code Section 304.003 governs judgments to which the contractual-rate provision in Section 304.002 does not apply.

The Consumer Credit Commissioner determines the rate for judgments rendered during the succeeding calendar month. Under the statute, the rate is generally based on the prime rate published by the Board of Governors of the Federal Reserve System on the date of computation, subject to a statutory floor and ceiling:

• If the applicable prime rate is below 5%, the rate is 5%;
• If the applicable prime rate is above 15%, the rate is 15%; and
• Otherwise, the applicable prime rate is used.

This is why the published Texas post-judgment rate can change over time.

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What If the Contract Has Its Own Interest Rate?

Texas Finance Code Section 304.002 creates an important rule for judgments based on contracts that provide for interest or a time-price differential.

In those cases, the money judgment generally earns post-judgment interest at the lesser of:

• The rate specified in the contract, which may be a variable rate; or
• 18% per year.

This distinction can matter significantly in lawsuits involving:

• Promissory notes;
• Business debt and personal guarantees;
• Installment loans;
• Lines of credit;
• Equipment financing; and
• Other written debt instruments containing interest provisions.

The judgment itself should specify the applicable post-judgment interest rate as required by Section 304.001.

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Does the Interest Rate Change Every Month on an Existing Judgment?

Usually not simply because the OCCC later publishes a different monthly rate.

For a judgment governed by Section 304.003, the relevant rate is the rate applicable to judgments rendered during the month in which that judgment was rendered. Later changes in the published rate do not ordinarily mean that the same judgment resets to a new statutory rate every month.

Contractual variable-rate judgments can present a different issue if the judgment and governing contract lawfully provide for a variable rate.

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Does Post-Judgment Interest Compound?

Yes. Texas Finance Code Section 304.006 provides that post-judgment interest on a Texas judgment compounds annually.

That means unpaid interest can itself become part of the balance on which later interest is calculated according to the statutory framework.

Why Compounding Matters

A judgment that remains unpaid for several years can grow faster than a simple-interest calculation would suggest. The effect becomes increasingly important on larger commercial judgments.

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When Does Post-Judgment Interest Begin?

Section 304.005 generally provides that post-judgment interest begins on the date the judgment is rendered.

It generally continues until the judgment is satisfied.

That means interest can continue while the creditor is:

• Conducting post-judgment discovery;
• Pursuing a writ of execution;
• Seeking a turnover order;
• Using a receiver;
• Maintaining a judgment lien;
• Negotiating settlement; or
• Waiting for the debtor to acquire collectible assets.

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What Does “Rendered” Mean?

Texas law distinguishes between rendition of judgment and later ministerial events such as entry or notice. In many cases the signed written judgment establishes the relevant date clearly, but procedural history can matter.

When calculating a substantial payoff, review the judgment and docket rather than assuming that the interest start date is the date the creditor mailed a copy or began collection.

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Does Interest Accrue During an Appeal?

Generally, post-judgment interest continues during an appeal unless a statutory exception applies.

Texas Finance Code Section 304.005(b) contains a specific exception when a case is appealed and a motion for extension of time to file a brief is granted for a party who was a claimant at trial; interest does not accrue during the period of that extension.

An appeal and supersedeas can affect collection rights, but staying enforcement is different from eliminating lawful interest accrual.

See Appealing a Texas Debt Lawsuit.

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Post-Judgment Interest Versus Prejudgment Interest

These are different concepts.

Prejudgment Interest

Prejudgment interest compensates for the period before judgment and depends on the type of claim, contract, statute, and applicable common law.

Post-Judgment Interest

Post-judgment interest accrues after rendition of the money judgment until satisfaction under Chapter 304.

A final judgment may include both prejudgment interest and post-judgment interest. A defendant reviewing a payoff should identify each component rather than treating “interest” as one undifferentiated number.

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Does Post-Judgment Interest Apply to Court Costs and Prejudgment Interest?

Section 304.003 expressly addresses a money judgment to which Section 304.002 does not apply and includes court costs awarded in the judgment and prejudgment interest, if any, within the judgment earning the statutory post-judgment rate.

Contract-based judgments can require separate analysis under Section 304.002 and the wording of the final judgment.

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Can Attorney’s Fees Accrue Interest?

Attorney’s fees incorporated into a final money judgment can affect the judgment balance and post-judgment interest calculation.

Some judgments also award conditional appellate attorney’s fees that become recoverable only if specified appellate events occur.

The judgment should be read carefully to determine:

• Fees awarded at trial;
• Conditional appellate fees;
• When those amounts become recoverable;
• The interest rate stated; and
• How the court structured the award.

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How Payments Affect Judgment Interest

A creditor’s payoff should account for every payment or collection credit received after judgment.

Possible credits include:

• Voluntary payments;
• Settlement payments;
• Bank garnishment proceeds;
• Execution-sale proceeds;
• Receiver collections;
• Turnover proceeds;
• Collateral proceeds;
• Insurance proceeds;
• Offsets; and
• Other amounts applied toward the judgment.

If the creditor calculated interest as though no prior collections occurred, the payoff may be overstated.

See Payment as a Defense.

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Why Old Judgment Payoffs Should Be Audited

An old judgment may involve years of interest, multiple creditors, assignments, partial payments, garnishments, or revival proceedings.

Common payoff issues can include:

• Wrong interest rate;
• Wrong start date;
• Failure to credit payments;
• Failure to credit garnishment proceeds;
• Incorrect compounding;
• Adding unauthorized fees;
• Applying a current rate instead of the judgment rate;
• Using the original debt amount instead of the judgment amount;
• Ignoring prior settlement credits;
• Assignment records that do not match the claimant; and
• Collection on a dormant or discharged judgment.

See Judgment Renewal.

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A Simple Judgment Interest Example

Assume a Texas judgment subject to a 6.75% annual post-judgment rate has an initial judgment balance of $50,000 and remains unpaid for one year.

A basic first-year interest calculation would be:

$50,000 × 6.75% = $3,375

That simplified example does not account for partial-year accrual, annual compounding, payments, credits, court-specific wording, contractual-rate issues, or other adjustments. It is intended only to show why a judgment can grow materially over time.

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Can a Creditor Charge the Original Contract Rate Forever?

Not automatically.

Once judgment is entered, the governing post-judgment rate should be determined under the judgment and Chapter 304. Section 304.002 can incorporate a contractual interest rate into the post-judgment rate, but it expressly caps that rate at the lesser of the contract rate or 18% per year.

A creditor should not simply continue an earlier account calculation without comparing it to the final judgment and governing post-judgment law.

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Judgment Interest and Settlement

Accrued interest is often negotiable as part of a post-judgment settlement even when the creditor has the legal right to claim it.

A settlement might involve:

• Waiver of some accrued interest;
• Discounted lump-sum payoff;
• Temporary interest freeze;
• Reduced settlement interest;
• Installment payments;
• Release of garnishment;
• Release of judgment liens;
• Termination of receivership;
• Satisfaction of judgment; and
• Release of remaining claims after performance.

See Settling a Texas Debt Lawsuit.

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Judgment Interest and Bankruptcy

Bankruptcy can affect both the enforceability of a judgment and accrual or collection of interest, depending on the debt, lien status, bankruptcy chapter, discharge, and whether the claim is secured or unsecured.

The treatment of post-petition interest in bankruptcy is governed by federal bankruptcy law and should not be assumed from the Texas judgment alone.

See Can Bankruptcy Stop a Debt Lawsuit?.

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Judgment Interest and Dormancy

A judgment can become dormant under Texas law if execution is not timely issued. Dormancy and interest are related but distinct issues.

If a creditor attempts to revive an old judgment, the correct balance may require analysis of:

• The original judgment amount;
• Applicable interest rate;
• Writ history;
• Dormancy;
• Revival;
• Payments;
• Prior collection proceeds; and
• Any bankruptcy or settlement history.

See Judgment Renewal and Revival.

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How Ridgely Davis Law Reviews Judgment Interest

We approach a judgment payoff as an accounting problem governed by a legal instrument.

Our review may include:

• The signed final judgment;
• Judgment-rendering date;
• Contractual interest provisions;
• Finance Code Sections 304.002 and 304.003;
• The applicable OCCC published rate;
• Annual compounding;
• Prejudgment interest;
• Attorney’s fees;
• Court costs;
• Every payment and collection credit;
• Assignment history;
• Dormancy or revival;
• Bankruptcy history;
• Creditor payoff statements; and
• Settlement opportunities.

A judgment creditor is entitled to what the judgment and law allow—not an unexplained number generated years later by a collection spreadsheet.

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1. Does a Texas debt judgment earn interest?

Generally yes. Texas Finance Code Chapter 304 governs post-judgment interest on Texas money judgments.

2. When does post-judgment interest begin?

Section 304.005 generally provides that it begins when the judgment is rendered.

3. When does it stop?

Generally when the judgment is satisfied, subject to applicable statutory rules.

4. What is the Texas post-judgment rate for August 2026?

The Texas Office of Consumer Credit Commissioner currently lists 6.75% for August 2026 for judgments governed by the published statutory rate.

5. Does every Texas judgment use 6.75%?

No. Contract judgments may be governed by Section 304.002, and judgments rendered in other months may have a different applicable statutory rate.

6. What if my contract says 12%?

Section 304.002 generally provides that a contract judgment earns the lesser of the contract rate or 18%, subject to the judgment and applicable law.

7. What if my contract says 24%?

Section 304.002 caps the post-judgment rate described by that section at the lesser of the contractual rate or 18% per year.

8. Does judgment interest compound?

Yes. Section 304.006 provides for annual compounding.

9. Does the interest rate change every month?

The OCCC publishes rates for judgments rendered during particular periods. An existing fixed-rate judgment does not ordinarily reset each month merely because a new rate is published.

10. Does interest accrue while I appeal?

Generally yes, although Section 304.005 contains a specific exception relating to certain extensions of time to file appellate briefs for claimants.

11. Does supersedeas eliminate interest?

No. Staying collection and stopping interest accrual are different issues.

12. Is prejudgment interest the same thing?

No. Prejudgment interest concerns the period before judgment; post-judgment interest concerns the period after rendition.

13. Does interest accrue on attorney’s fees?

Attorney’s fees incorporated into the money judgment can affect the post-judgment balance, but the exact judgment language should be reviewed.

14. Does interest accrue on court costs?

Section 304.003 expressly includes court costs awarded in judgments governed by that section.

15. What if I made payments after judgment?

All lawful payments and collection credits should be included when determining the remaining payoff.

16. What if the creditor already garnished money?

Garnishment proceeds applied to the judgment should be credited in the judgment accounting.

17. Can the creditor waive judgment interest?

Yes. Accrued or future interest can sometimes be negotiated as part of a settlement.

18. What if the judgment is more than 10 years old?

Review dormancy and revival as well as the interest calculation. An old judgment can still be enforceable if statutory requirements were met.

19. How do I verify an old payoff?

Obtain the signed judgment, applicable rate, full payment history, collection credits, and creditor’s interest calculation and reconstruct the balance.

20. When should I contact Ridgely Davis Law?

When a creditor claims a growing judgment balance, demands an old payoff, begins collection, or refuses to explain how interest was calculated.

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Continue Your Research

• Business Debt with Personal Guarantees
• Promissory Note Lawsuits
• SBA Loan Lawsuits
• Merchant Cash Advance Lawsuits
• Equipment Financing Lawsuits
• What to Do If You Were Just Served
• Texas Answer Deadline
• Filing an Answer
• Discovery in Texas Debt Lawsuits
• Summary Judgment in Texas Debt Lawsuits
• Settling a Texas Debt Lawsuit
• Mediation in Texas Debt Lawsuits
• Standing to Sue
• Assignment of Debt
• Business Records Affidavits
• Payment as a Defense
• Understanding Judgments
• Post-Judgment Discovery
• Bank Account Seizure
• Can Bankruptcy Stop a Debt Lawsuit?

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