Partial payments and credits on a Texas judgment
A partial payment makes a Texas judgment smaller, but interest keeps running on whatever interest-bearing balance remains. What it is worth depends on when it was paid and how it is split between interest and the balance. Here is what the statutes say, the order JudgmentVault applies each payment in, and a worked example.
In short
- Post-judgment interest runs until the judgment is satisfied, or until a full tender stops it (see below), so a partial payment reduces what is owed but interest keeps running on whatever interest-bearing balance remains (Fin. Code §304.005(a)).
- The statutes do not say how a payment is split between interest and the balance. JudgmentVault applies it to accrued interest first, then to the balance, then to post-judgment costs. That order is pending legal review.
- The date of each payment matters: interest is figured on the balance between payments, and unpaid interest compounds on each anniversary (§304.006).
- Keep a complete payment record: correct a mistake with a reversing entry rather than by editing or deleting the original.
What a partial payment does and does not do
Post-judgment interest "accrues during the period beginning on the date the judgment is rendered and ending on the date the judgment is satisfied" (§304.005(a)). A payment of less than the full amount does not satisfy the judgment, so interest keeps running on the interest-bearing balance that remains. If only post-judgment costs are left unpaid, which do not bear interest, no further interest accrues. (Statute also pauses interest during an extension of time to file an appellate brief granted to a party who was a claimant at trial (§304.005(b)), and, on an award not appealed, on the part subject to a Medicare subrogation right until the defendant receives the federal recovery demand letter, or at all if that part is paid before the 31st day after it is received (Civ. Prac. & Rem. Code §41.014); JudgmentVault calculates neither.) What the payment changes is what is owed: it pays down interest accrued so far, and once that is paid, it reduces the amount interest runs on from that day forward.
A credit works the same way as a payment. Money that reaches the judgment holder through a court process, such as funds paid over by a garnishee, is entered as a credit on the date it applies.
The order JudgmentVault applies a payment in
Texas post-judgment interest compounds annually (§304.006), so between anniversaries a judgment has two parts: the balance that bears interest, and the interest accrued since the last anniversary, not yet added to it.
Texas does not use interest-first everywhere. Child support payments, for example, go to principal first (Tex. Fam. Code §157.268). JudgmentVault does not calculate child support judgments.
Worked example
A judgment for $20,000.00 is rendered on June 15, 2023, at the June 2023 rate of 8.25%. The debtor pays $1,000.00 on March 15, 2024 and $5,000.00 on September 16, 2024.
| Date | Event | To interest | To balance | Balance bearing interest after |
|---|---|---|---|---|
| March 15, 2024 | Payment of $1,000.00 | $1,000.00 | $0.00 | $20,000.00 |
| June 15, 2024 | Anniversary: $650.00 of interest compounds | — | — | $20,650.00 |
| September 16, 2024 | Payment of $5,000.00 | $434.07 | $4,565.93 | $16,084.07 |
| June 15, 2025 | Anniversary: $988.84 of interest compounds | — | — | $17,072.91 |
The first payment is smaller than the interest accrued by then, so all of it goes to interest and the balance is unchanged. The first anniversary compounds only the interest still unpaid. The second payment goes first to the interest accrued since that anniversary, and the rest reduces the balance, so the next year's interest runs on less. On June 15, 2025 the judgment's payoff is $17,072.91.
Pending legal review These figures come from the same calculation engine as JudgmentVault's calculators, computed when this page was built. They use the payment order above and the part-year day count described in how post-judgment interest works in Texas, both awaiting review by counsel.
Post-judgment costs
Interest runs on the judgment, "including court costs awarded in the judgment and prejudgment interest" (§304.003(a)). Costs that come later, such as the fees for issuing a writ, are not part of the judgment as rendered.
When a payment satisfies the judgment
Interest ends when the judgment is satisfied (§304.005(a)). A payment of the full payoff on its date satisfies it.
Texas courts have also held that post-judgment interest stops when the debtor makes a timely, unconditional tender of the full amount due, even if the holder does not accept it. A payment into the court's registry can count, but only if it is unconditional and the holder is free to take it; a deposit made only to suspend enforcement during an appeal does not stop interest (Anglo-Dutch Petroleum Int'l, Inc. v. Greenberg Peden, P.C., No. 14-14-00706-CV (Tex. App.—Houston [14th Dist.] 2016)). The debtor has to prove the tender (Breault v. Psarovarkas, No. 01-01-00122-CV (Tex. App.—Houston [1st Dist.] 2003, mem. op.)). JudgmentVault does not record tenders; it stops interest only on a payment or a release entered in its ledger.
Keeping the payment record
Because the date and amount of every payment change the figures that follow, keep the payment record complete: correct a payment entered by mistake with a reversing entry, which cancels it and leaves both on the record. JudgmentVault's calculation engine treats corrections the same way. The free calculators keep no record; they work from the payments entered each time. What to keep alongside the ledger is covered in what records a Texas judgment holder should keep, and every rule JudgmentVault applies is listed in the Texas methodology.
Sources
- Tex. Civ. Prac. & Rem. Code §41.014: no interest on the part of an unappealed award subject to Medicare subrogation until the demand letter, or if paid before the 31st day after it is received.
- Tex. Fin. Code §304.003(a): what bears interest: the judgment, including awarded court costs and prejudgment interest.
- Tex. Fin. Code §304.005(a): interest accrues from rendition until the judgment is satisfied.
- Tex. Fin. Code §304.005(b): no interest during an appellate briefing extension granted to a claimant.
- Tex. Fin. Code §304.006: post-judgment interest compounds annually.
- Brainard v. Trinity Universal Ins. Co., 216 S.W.3d 809 (Tex. 2006): credits applied first to accrued interest, then principal (prejudgment interest).
- Samson Exploration, LLC v. Hooks, No. 09-18-00390-CV (Tex. App.—Beaumont 2020, mem. op.): declining-principal method applied to post-judgment payments.
- Breault v. Psarovarkas, No. 01-01-00122-CV (Tex. App.—Houston [1st Dist.] 2003, mem. op.): a timely, unconditional tender of the full amount stops post-judgment interest.
- Anglo-Dutch Petroleum Int'l, Inc. v. Greenberg Peden, P.C., No. 14-14-00706-CV (Tex. App.—Houston [14th Dist.] 2016): a registry deposit in lieu of a supersedeas bond is not an unconditional tender and does not stop post-judgment interest.
- Tex. Fam. Code §157.268: child support applies payments to principal first, a different rule.
The rules JudgmentVault applies, and which are still pending legal review, are listed rule by rule in how JudgmentVault calculates Texas judgments.