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Post Judgment Interest in Texas

Post Judgment Interest Rates in Texas
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Current Post-Judgment Interest Rate in Texas

The post-judgment interest rate in Texas is calculated based on rules set by the Texas Finance Code, Chapter 304, which governs interest on judgments. This rate applies to unpaid judgments to compensate the creditor for the time the debtor delays payment.

The post-judgment interest rate in Texas is determined by the prime rate but cannot fall below 5% or exceed 15%. To find the current rate, check the Texas OCCC website, as it is updated regularly.

Understanding the post-judgment interest rate is crucial for both creditors and debtors to calculate obligations accurately and plan for resolution.

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How is the Post-Judgment Interest Rate Determined?

Base Rate:

  • The post-judgment interest rate is tied to the prime rate as published by the Federal Reserve.
  • If the prime rate falls below 5%, Texas law sets the minimum post-judgment interest rate at 5%.

Range:

  • The interest rate can range from a minimum of 5% to a maximum of 15%, depending on the prime rate.

Annual Adjustment:

  • The rate is adjusted periodically, so it’s important to verify the current rate at the time the judgment is issued or enforced.

Contractual Exception:

  • If a contract specifies a different interest rate (e.g., in loan agreements or promissory notes), the contract’s rate may apply, as long as it does not exceed the maximum legal limit.

Example $5,000 judgment

Below is an example of how a judgment amount of $5,000 plus attorneys fees can grow over 20 years when factoring in attorney’s fees, court costs, and post-judgment interest.

Assumptions:

  1. Principal Judgment: $5,000
  2. Attorney’s Fees and Costs: $2,000
  3. Post-Judgment Interest Rate: 5% annually (compounded annually, as is standard in many jurisdictions unless otherwise stated).
  4. No payments are made during this period.

Year-by-Year Balance:

Year

Beginning Balance

Interest (5%)

Ending Balance

1

$7,000.00

$350.00

$7,350.00

2

$7,350.00

$367.50

$7,717.50

3

$7,717.50

$385.88

$8,103.38

4

$8,103.38

$405.17

$8,508.55

5

$8,508.55

$425.43

$8,933.98

6

$8,933.98

$446.70

$9,380.68

7

$9,380.68

$469.03

$9,849.71

8

$9,849.71

$492.49

$10,342.20

9

$10,342.20

$517.11

$10,859.31

10

$10,859.31

$542.97

$11,402.28

11

$11,402.28

$570.11

$11,972.39

12

$11,972.39

$598.62

$12,571.01

13

$12,571.01

$628.55

$13,199.56

14

$13,199.56

$659.98

$13,859.54

15

$13,859.54

$692.98

$14,552.52

16

$14,552.52

$727.63

$15,280.15

17

$15,280.15

$764.01

$16,044.16

18

$16,044.16

$802.21

$16,846.37

19

$16,846.37

$842.32

$17,688.69

20

$17,688.69

$884.43

$18,573.12

Explanation:

  • Principal and Costs: The initial $5,000 judgment plus $2,000 in attorney’s fees and costs results in a starting balance of $7,000.
  • Interest Growth: Post-judgment interest at 5% compounded annually increases the total balance each year.
  • Result After 20 Years: Without payments, the total amount due grows to $18,573.12.

This table highlights the importance of addressing judgments promptly, as even relatively modest amounts can significantly increase due to interest over time.

Where to Find the Current Rate

The Texas Office of Consumer Credit Commissioner (OCCC) publishes the current post-judgment interest rate each month.

Steps to Check the Current Rate:

  1. Visit the Texas OCCC website: Texas OCCC Post-Judgment Interest Rate.
  2. Navigate to the “Judgment Rates” section.
  3. Review the published rate for the applicable month.

The official website for the Texas Office of Consumer Credit Commissioner (OCCC) is:

https://occc.texas.gov

To find the current post-judgment interest rates, navigate to the “Interest Rates” section of the website or use the direct link below for judgment rates:

https://occc.texas.gov/interest-rates

This page provides the monthly updated judgment interest rates and other relevant information.

Mike Weston, Esq.

Mike Weston is a seasoned debt lawsuit defense attorney and founder of Weston Legal. Since 2005, Mike has devoted his career to compassionately helping consumers struggling with issues involving their personal and business debts. Mike is grateful to have been able to help tens of thousands of clients become empowered with knowledge on the path to financial stability.

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