California Small Claims Judgment Interest Rate: 5%, 7%, or 10%?
Three Rates, One Statute
California doesn't apply a single interest rate to all money judgments. Under CCP § 685.010, the rate depends on the type of debt and when the judgment was entered or last renewed. Getting this wrong means either under-collecting (leaving money on the table) or over-claiming (which the debtor can challenge in a motion to tax costs).
| Judgment Type | Annual Rate | When It Applies |
|---|---|---|
| Standard commercial, business, or tort | 10% | Default rate for all judgments not falling into the categories below |
| Personal debt with unpaid principal under $50,000 or medical debt with unpaid principal under $200,000 | 5% | Judgments entered or renewed on or after January 1, 2023, against a natural person, except judgments based on tort or fraud or for unpaid employee wages |
| Public entity (state or local government) | 7% | Judgments against government bodies |
Most small claims judgments between individuals fall into the 5% category if they meet the criteria above. The 2023 amendment was a significant reduction — before it, all judgments accrued interest at 10%.
When Interest Starts Accruing
Post-judgment interest begins on the date of judgment entry, not the date you start enforcement. It accrues during the 30-day enforcement stay, during any appeal period, and during any period the debtor fails to pay. During a judgment term, interest accrues on the unpaid principal. When the judgment is renewed, accrued interest is included in the renewed judgment balance, which then bears interest going forward.
The daily rate formula: (annual rate ÷ 365) × unpaid principal = daily interest.
Example: $5,000 Personal Debt Judgment at 5%
Daily rate: $5,000 × 0.05 ÷ 365 = $0.685 per day
After six months (182 days): $0.685 × 182 = $124.66 in accrued interest.
After one year: $0.685 × 365 = $250.00.
If the debtor makes a partial payment, apply it first to allowed costs and then accrued interest before applying any remainder to principal under CCP § 695.220. Only the amount credited to principal reduces future interest. Interest earned before the partial payment doesn't get reduced retroactively.
How the 10% Rate Still Applies
The 10% rate continues to apply in several situations that come up in small claims:
- Business-to-business disputes — a contractor suing an LLC for unpaid invoices, a vendor suing a business customer
- Tort judgments — property damage claims, fraud, conversion of personal property
- Judgments entered before January 1, 2023 that have not been renewed — these keep the rate that applied at entry
- Personal debt judgments over $50,000 — uncommon in small claims given the $12,500 cap, but possible in de novo appeal where costs and interest push the total higher
The 5% rate specifically targets qualifying judgments against a natural person (not a corporation or LLC) for personal, family, or household debt, or for medical debt. If the debtor is a business entity, the 10% rate applies even if the underlying transaction was consumer-like.
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Claiming Interest on Form MC-012
You recover accrued interest through Form MC-012 (Memorandum of Costs After Judgment). The form includes a section for declaring the interest calculation. Show your math: the principal amount, the daily rate, the number of days, any partial payment credits, and the total interest owed.
File MC-012 periodically — after each enforcement action — rather than waiting until the judgment is fully satisfied. This adds the accrued interest and enforcement costs to the outstanding judgment balance, which means future levies and garnishments collect the higher total.
Common Mistakes
Using the wrong rate. The 5% rate only applies to judgments entered or renewed on or after January 1, 2023. If you're enforcing an older judgment that hasn't been renewed, the 10% rate applies regardless of debt type.
Forgetting to credit partial payments. Apply payments to allowed costs, then accrued interest, then principal. If the sheriff distributes $1,500 from a bank levy and that payment clears allowed costs and accrued interest first, leaving $3,500 in principal, the future daily rate at 5% is $3,500 × 0.05 ÷ 365 = $0.479 per day.
Compounding interest. During a judgment term, interest accrues on unpaid principal, not on previously accrued interest. When you renew the judgment, accrued interest is included in the renewed judgment balance and earns interest going forward. Apply partial payments to allowed costs, then accrued interest, then principal.
The California Small Claims Judgment Collection Guide includes a judgment balance ledger that calculates daily interest at the correct rate and adjusts automatically for partial payments, so your MC-012 filing matches what the court expects.
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