Colorado Small Claims Court Interest Rate: 8% Statutory Default

The 8% Default Rate

When a contract does not specify an interest rate, Colorado law sets the default at 8% per year under C.R.S. § 5-12-102. This rate applies to both prejudgment interest (the period before you win your case) and postjudgment interest (the period after the judgment until the defendant actually pays).

The 8% rate is compounded annually — not monthly, not daily. The statutory formula is straightforward:

Total = Principal × (1 + 0.08) ^ years

If someone owes you $3,000 and withheld payment for 18 months, the interest calculation works out to roughly $366 in prejudgment interest.

Prejudgment Interest: From the Day Money Was Wrongfully Withheld

Prejudgment interest starts accruing from the date the money was wrongfully withheld — the date the invoice went unpaid, the date the security deposit should have been returned, or the date the damage occurred. It runs until the court enters judgment.

You can include prejudgment interest in your claim amount on Form JDF 250. Calculate it from the accrual date through your estimated trial date. The $7,500 small claims limit applies to principal, exclusive of prejudgment interest and allowable court costs, so check the principal amount separately.

When a Contract Sets Its Own Rate

If the underlying agreement specifies a lawful interest rate — common in commercial contracts, promissory notes, and some rental agreements — the court applies that contractual rate instead of the 8% default. Colorado's usury cap under C.R.S. § 5-12-103 limits contractual interest to 45% per annum, so any rate above that is unenforceable.

Bring the contract to your hearing and highlight the interest clause. The judge will apply the agreed rate if it falls within legal limits.

The Medical Debt Exception

C.R.S. § 5-12-102(5)(a) caps interest on medical debt at 3% per year. Whether a contract rate controls depends on the agreement and applicable law.

Postjudgment Interest After You Win

Once the court enters a judgment in your favor, postjudgment interest begins accruing at the same 8% statutory rate (or the contractual rate, if one applies). This interest continues until the judgment debtor pays in full.

Postjudgment interest matters most when collection takes time. If the defendant does not pay voluntarily and you pursue wage garnishment or bank levies, interest keeps accumulating on the unpaid balance. When you eventually collect, the total owed includes the original judgment amount plus all accrued postjudgment interest.

Including Interest on Your Claim Form

On Form JDF 250, list your principal amount and your interest calculation separately. Show your work: the starting date, the principal, the rate, and the total interest claimed. Judges appreciate seeing a clear breakdown rather than a single lump number.

If you are uncertain about the calculation or whether interest applies to your specific type of claim, check the applicable law or seek legal advice before including it. If you need to change your claim after filing, ask the clerk about the amendment procedure.

Our Colorado Small Claims Filing Guide includes a filing cost estimator that helps you calculate the total claim amount — principal, interest, and fees — so your JDF 250 is accurate from the start.

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