Alabama Post-Judgment Interest Rate: How to Calculate What You're Owed

Every unpaid Alabama money judgment grows a little bigger each day. Under Alabama Code § 8-8-10, post-judgment interest accrues at a flat rate of 7.5% per year — simple interest, not compound — from the date of judgment entry until the judgment is fully satisfied. The debtor owes this whether they agreed to it or not.

The Basic Formula

Post-judgment interest in Alabama is calculated as simple daily interest:

Daily interest = (Unpaid principal × 0.075) ÷ 365

Multiply the daily rate by the number of days since judgment entry to get the total accrued interest.

Worked Example

You won a $4,000 judgment on January 15. As of July 14 (180 days later), the debtor still hasn't paid.

• Daily rate: ($4,000 × 0.075) ÷ 365 = $0.8219 per day
• 180 days of interest: $0.8219 × 180 = $147.95
• Total owed: $4,147.95 (principal + interest)

If it takes a full year to collect, interest alone adds $300 to a $4,000 judgment. On the $6,000 small claims cap, that's $450 per year.

When a Different Rate Applies

The 7.5% statutory rate is the default, but it doesn't always apply. If the original claim was based on a written contract that specified a different legal interest rate, that contract rate may carry through into the judgment. The judge decides this at trial.

For most small claims judgments — landlord-tenant disputes, unpaid services, property damage — the 7.5% statutory rate applies because there's no written contract specifying a different rate.

Interest on the Full Balance

Post-judgment interest accrues on the unpaid judgment principal. Court costs awarded as part of the judgment are included in the amount owed.

Authorized post-judgment enforcement costs (garnishment fees, sheriff service fees, and writ expenses) are added to the collectible balance. Confirm with the clerk how those costs are reflected in the interest calculation for your case.

Partial Payments

When the debtor makes partial payments, Alabama law requires payments to be applied in this order:

1. Court costs
2. Accrued post-judgment interest
3. Judgment principal

This matters because interest keeps running on whatever principal remains unpaid. A $500 partial payment on a $4,000 judgment doesn't simply reduce the principal to $3,500 — it first covers any accumulated costs and interest, with only the remainder reducing the principal.

Why This Matters for Enforcement

Whenever you file a garnishment (Form C-21) or request a writ of execution, you need to state the current total owed — principal plus accrued interest plus costs. Understating the amount means you collect less than you're entitled to. Overstating it creates legal problems.

Keeping a running ledger is essential for any judgment that takes more than a few weeks to collect.

Track Every Dollar

The Alabama Judgment Collection Guide includes an interest calculation ledger and payment tracking system designed for Alabama's 7.5% statutory rate — along with the complete enforcement process for garnishments, liens, and property execution.

See more Alabama guides →