What Is Post-Judgment Interest on Unpaid Invoices? The Rate Depends on the Court
You won. The judge signed the order on the unpaid invoice, and now the meter is still running, just on different rules. Post-judgment interest on unpaid invoices is the interest that accrues on the judgment from the day it is entered until the debtor pays. Your contract rate got you to the courthouse door. The law picks up from there, and which law depends entirely on which courtroom you were standing in.
The routing rules: which rate applies to your judgment
If your judgment came from a state court, the state's statutory rate applies. New York charges 9% simple interest per year under CPLR 5004. California charges 10% per year, or 7% when the debtor is a state or local government entity. Every state has its own number, and most of them are fixed, which makes the math easy.
If your judgment came from a federal court, the rate is set by 28 U.S.C. 1961: the weekly average one-year constant maturity Treasury yield for the calendar week before the judgment was entered, as published by the Federal Reserve. Courts have held this award is mandatory on money judgments in federal civil cases. Two differences from the state approach: the federal rate moves with the market instead of sitting fixed, and it is computed daily and compounded annually rather than accruing as simple interest.
If your contract named a rate for judgments, that rate can win, but only if the language is clear and unambiguous about applying to the judgment debt itself. Courts do not infer it. A generic late-payment clause on an invoice almost never qualifies.
| Judgment from | Rate | Compounding |
|---|---|---|
| NY state court | 9% simple | No |
| California state court | 10% (7% vs. government) | No |
| Federal court | Treasury-linked, market rate | Yes, annually |
What post-judgment interest looks like in dollars
Take a $50,000 invoice judgment in New York state court. At 9% simple, that is $4,500 a year, or about $12.33 a day, for every day the debtor does not pay. If it takes two years to collect, you are owed $59,000. The same judgment in California at 10% accrues $5,000 a year.
Under the federal formula, a $50,000 judgment at a 4% Treasury yield accrues about $2,000 in the first year, compounding annually after that. The federal rate has historically run well below New York's fixed 9%. That spread is what lawyers fight over when they argue about which rate governs a judgment. Getting this wrong is a common and expensive error: recalculating after the fact is nobody's idea of fun.
My view on where this matters most: for freelancers, post-judgment interest is the reason a $12,000 invoice dispute is worth pursuing even when the client is slow. The interest turns delay into your asset. And the one sentence that changes everything is in your contract before any dispute starts: a clause that sets the judgment rate in clear language, so you are not stuck with whichever statutory number the court hands you.
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Calculate late-payment interest freeFrequently asked questions
What is post-judgment interest on an unpaid invoice?
Interest that accrues on a court judgment from the date it is entered until it is paid. It starts where your contract or statutory late-payment interest stopped, and it is set by law, not by your invoice terms.
What is the federal post-judgment interest rate?
Under 28 U.S.C. 1961, the rate equals the weekly average 1-year constant maturity Treasury yield for the calendar week before the judgment was entered. It is computed daily and compounded annually, and it is mandatory on money judgments in federal civil cases.
What is the post-judgment interest rate in New York?
9% simple interest per year under CPLR 5004 for judgments in New York state courts. Judgments from federal courts in New York use the federal Treasury-linked rate instead.
Can post-judgment interest compound?
Under federal law, yes: 28 U.S.C. 1961 interest is computed daily and compounded annually. New York state post-judgment interest is simple, not compound.
Does my contract interest rate override the statutory post-judgment rate?
Only if the contract states in clear, unambiguous language that a particular rate applies to the judgment debt itself. Otherwise the statutory rate for the court that entered the judgment controls.
Related: How Long Do You Have to Collect an Unpaid Invoice? Statute of Limitations by State · Should Late Payment Interest Be Simple or Compound on Invoices? · How Long Do You Have to Collect Interest on an Unpaid Invoice? · What Is a Reasonable Late Payment Interest Rate to Charge on Invoices?
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