If you win a lawsuit in Texas and receive a money judgment, the court does not simply enter a number and walk away. Under Texas law, judgments earn interest — sometimes for years — until they are paid.

Understanding post-judgment interest can dramatically affect settlement strategy, collection tactics, and the real value of a case.

Here is what Texas law actually says.

1. What Is Post-Judgment Interest?

Post-judgment interest is the interest that accrues on a court judgment after it is signed.

The governing statute is:

Texas Finance Code § 304.003

It provides:

“A money judgment of a court of this state earns postjudgment interest at a rate determined under this chapter.”

This means interest accrues automatically unless the judgment states otherwise.

2. What Is the Interest Rate?

The rate depends on the type of case.

A. Contract Cases

Under Texas Finance Code § 304.002, if a contract specifies an interest rate, that rate applies to the judgment.

If the contract does not specify a rate:

• The rate is the prime rate as published by the Federal Reserve.
• The rate cannot be less than 5% or more than 15% per year.

B. Non-Contract Cases (Torts, etc.)

Under Texas Finance Code § 304.003(c):

• The post-judgment interest rate is the prime rate.
• It is capped between 5% and 15%.

The Office of Consumer Credit Commissioner publishes the official rate.

3. When Does Post-Judgment Interest Begin?

Under Texas Finance Code § 304.005, post-judgment interest begins to accrue:

“on the date the judgment is rendered.”

Not when it becomes final.
Not after appeal.
Not when abstracted.

The day it is signed.

This matters in contested business disputes or construction cases that drag through appeals.

4. Is It Simple or Compound Interest?

Texas post-judgment interest is simple interest, not compound.

See Texas Finance Code § 304.006:

“Postjudgment interest on a money judgment accrues at a simple interest rate.”

This means:

• Interest does not earn interest.
• It is calculated annually on the principal.

5. Does It Apply During Appeal?

Yes.

If a defendant appeals and supersedes the judgment (posts a bond), interest continues to accrue during the appeal.

This is why delay can become expensive.

6. Why This Matters Strategically

As a practical matter:

• A $100,000 judgment at 8% earns $8,000 per year.
• Over five years, that is $40,000 in additional exposure.

In commercial cases, this often becomes leverage:

• Plaintiffs can afford to wait.
• Defendants must evaluate cost of delay.

It also affects:

• Divorce property equalization awards
• Promissory note disputes
• Business buy-outs
• Construction payment litigation

7. Can the Parties Change the Rate?

Yes — in contract cases.

If a written agreement specifies a lawful interest rate, courts typically enforce it under Texas Finance Code § 304.002.

However, usury laws still apply, and an unlawful rate may be reduced.

8. Does Pre-Judgment Interest Differ?

Yes.

Pre-judgment interest is governed by separate rules, including:

Texas Finance Code § 304.104

Pre-judgment interest often begins 180 days after notice of a claim in personal injury cases, or at the time specified by contract in commercial disputes.

That is a separate (but related) calculation.

Final Thoughts

Winning a lawsuit is not just about the principal amount.

Under Texas law, a judgment is a growing financial obligation until it is paid.

If you are:

• Enforcing a judgment
• Defending against collection
• Considering appeal
• Negotiating settlement after judgment

Post-judgment interest should be part of the strategy discussion.

If you have questions about collecting or defending against a Texas judgment, my office handles civil litigation, business disputes, and post-judgment remedies throughout the Houston area.

At David C. Barsalou, Attorney at Law, PLLC, we help clients navigate business, family, tax, estate planning, and real estate matters ranging from document drafting to litigation with clarity and confidence. If you’d like guidance on your situation, schedule a consultation today. Call us at (713) 397-4678, email barsalou.law@gmail.com, or reach us through our Contact Page. We’re here to help you take the next step.