How post-judgment interest works in Texas
A Texas money judgment keeps earning interest from the day it is rendered until it is paid. For most judgments the rate is fixed when the judgment is rendered and never changes (a judgment on a contract with a variable rate is the exception), and unpaid interest compounds once a year. Here is where the rate comes from, what it runs on, and how the math works, with a worked example to the cent.
In short
- Most judgments carry the rate the OCCC publishes for the month they are rendered: the prime rate, but never below 5% or above 15% a year (Fin. Code §304.003).
- A judgment on a contract that sets an interest rate carries the lesser of that rate and 18% a year (§304.002).
- Interest runs on the whole judgment, including awarded court costs and prejudgment interest, from rendition until the judgment is satisfied (§§304.003(a), 304.005).
- Post-judgment interest compounds annually (§304.006).
Where the rate comes from
A Texas money judgment has to state the post-judgment interest rate that applies to it (Tex. Fin. Code §304.001), so the judgment itself is the first place to look. Which rate the court uses depends on whether the judgment rests on a contract that provides for interest.
Judgments without a contract rate: the monthly OCCC rate
On the 15th of each month, the Texas Consumer Credit Commissioner (the OCCC) sets the post-judgment rate for judgments rendered during the next calendar month (§304.003(b)). The rate is the prime rate published by the Federal Reserve Board on that date, with a floor and a cap: if prime is below 5%, the rate is 5% a year, and if prime is above 15%, the rate is 15% a year (§304.003(c)). The rate is published in the Texas Register (§304.004), and courts take judicial notice of it (§304.007).
The month that matters is the month the judgment is rendered. A judgment keeps that month's rate for its whole life, even when the published rate later rises or falls. Some examples from the OCCC's published history:
| Judgment rendered in | Rate for its whole life |
|---|---|
| June 2021 | 5.00% |
| June 2023 | 8.25% |
| June 2024 | 8.50% |
| June 2025 | 7.50% |
Between 2009 and 2022 the rate sat at the 5% floor for most months, because prime was below 5%. It rose with prime from late 2022.
Judgments on a contract: the contract rate, capped at 18%
If the judgment is on a contract that provides for interest or a time-price differential, the post-judgment rate is the lesser of the rate the contract specifies, which may be a variable rate, and 18% a year (§304.002). A contract at 24% produces an 18% judgment rate; a contract at 10% produces 10%.
What earns interest
For a judgment under §304.003, post-judgment interest runs on the whole money judgment, "including court costs awarded in the judgment and prejudgment interest, if any" (§304.003(a)). Attorney's fees awarded in the judgment are part of the money judgment too. So the starting balance is everything the judgment awards, not just the damages.
Costs that come later, such as the fees for issuing and serving a writ, are a different matter: the statute speaks only of costs awarded in the judgment.
When interest starts and stops
Interest accrues from the date the judgment is rendered and ends on the date it is satisfied (§304.005(a)). A partial payment reduces what is owed but does not stop interest; only satisfaction does. There is one statutory pause: if the case is appealed and a party who was a claimant at trial is granted an extension of time to file a brief, interest does not accrue during the extension (§304.005(b)). JudgmentVault does not yet calculate that pause.
Annual compounding
Texas post-judgment interest "compounds annually" (§304.006). Each year, the interest that has built up and not been paid is added to the balance, and the next year's interest runs on the larger balance. Over a long life, that adds up: the gap between simple and compound interest grows every year the judgment goes unpaid.
The statute does not name the compounding date. JudgmentVault compounds on each anniversary of the rendition date, always counted from the original date.
Worked example
A judgment rendered on June 15, 2023 awards $20,000.00 in damages, $1,200.00 in prejudgment interest, $3,500.00 in attorney's fees and $450.00 in court costs: $25,150.00 in all. It is not on a contract, so it carries the June 2023 rate of 8.25%. Nothing has been paid.
| Good through | Balance bearing interest | Interest since last anniversary | Total |
|---|---|---|---|
| June 14, 2024 | $25,150.00 | $2,069.21 | $27,219.21 |
| June 15, 2024 | $27,224.88 | $0.00 | $27,224.88 |
| June 15, 2025 | $29,470.93 | $0.00 | $29,470.93 |
| June 15, 2026 | $31,902.28 | $0.00 | $31,902.28 |
| October 15, 2026 | $31,902.28 | $879.72 | $32,782.00 |
On the first anniversary, $2,074.88 of interest moves into the balance. The second year earns $2,246.05, more than the first, because it runs on the larger balance. After three years the judgment has earned $6,752.28 in interest, against $6,224.64 if the interest never compounded. On October 15, 2026 it earns about $7.21 a day.
Pending legal review These figures come from the same calculation engine as JudgmentVault's calculators, computed when this page was built. The anniversary amounts follow from the statute's annual rate and compounding; the part-year interest and the daily figure use the day count and rounding described above, which await review by counsel.
Payments and credits
A payment or a garnishment credit reduces the judgment, but the statutes do not say in what order it is applied to interest and to the balance.
Judgments these rules do not cover
Child support judgments follow their own interest rules under the Family Code, and judgments from federal courts or other states' courts use different rate rules. JudgmentVault does not calculate those, nor judgments rendered before 2005, when an older rate method applied. The full list is in the Texas methodology.
Sources
- Tex. Fin. Code §304.001: a money judgment must state its post-judgment rate.
- Tex. Fin. Code §304.002: contract judgments: the lesser of the contract rate and 18% a year.
- Tex. Fin. Code §304.003: the monthly rate: prime, not less than 5% or more than 15%; what bears interest.
- Tex. Fin. Code §304.004: the rate is published in the Texas Register.
- Tex. Fin. Code §304.005: accrual from rendition until satisfied; the appeal-extension pause.
- Tex. Fin. Code §304.006: post-judgment interest compounds annually.
- Tex. Fin. Code §304.007: courts take judicial notice of the published rate.
- OCCC post-judgment rate history: the published monthly rates.
- Tex. Gov't Code §311.014: counting days and months, and the last day of a short month.
- Brainard v. Trinity Universal Ins. Co., 216 S.W.3d 809 (Tex. 2006): credits applied first to accrued interest, then principal (prejudgment interest).
- Tex. Fam. Code §157.265: interest on child support follows its own rule.
The rules JudgmentVault applies, and which are still pending legal review, are listed rule by rule in how JudgmentVault calculates Texas judgments.