Hawaii Post-Judgment Interest Rate: 10% Per Year Under HRS 478-3

Every unpaid Hawaii judgment accrues interest at 10% per year under HRS § 478-3. This is not compound interest — it is simple interest calculated on the outstanding principal balance, running from the date the judgment was entered until it is paid in full. For a judgment creditor, this means the amount owed grows automatically while you pursue enforcement.

The Formula

Post-judgment interest is calculated as:

Interest = Principal × 0.10 × (Days ÷ 365)

Where "Principal" is the unpaid judgment balance, "Days" is the number of calendar days since entry (or since the last payment that reduced the principal), and 0.10 is the statutory 10% annual rate.

Worked Example

A Hawaii District Court enters a judgment for $4,000 plus $35 in court costs on January 1. The debtor makes no payment for six months.

Interest through July 1 (181 days): $4,000 × 0.10 × (181 ÷ 365) = $198.36

Total owed on July 1: $4,000 (principal) + $35 (costs) + $198.36 (interest) = $4,233.36

Now the debtor pays $1,500 on July 1. That payment is applied in order:

1. Court costs: $35 — cleared
2. Accrued interest: $198.36 — cleared
3. Principal reduction: $1,500 – $233.36 = $1,266.64 applied to principal
4. New principal balance: $4,000 – $1,266.64 = $2,733.36

From July 2 forward, interest accrues on $2,733.36, not the original $4,000.

Payment Application Order

This is one of the most commonly misunderstood parts of judgment collection. When a debtor makes a partial payment, the creditor applies it in this sequence:

1. Court costs and approved post-judgment enforcement expenses (filing fees, process service fees)
2. Accrued post-judgment interest
3. Principal balance

This means early partial payments go largely toward interest and costs, not the principal. The debtor's principal barely moves until the accumulated interest and costs are cleared. If you are tracking a judgment with regular garnishment payments, maintaining an accurate ledger with this application order is essential.

How This Affects Collection Timeline

The 10% rate works in the creditor's favor over time. On a $5,000 judgment, interest alone adds $500 per year — $1.37 per day. Over a two-year collection period, the debtor owes an additional $1,000 in interest on top of the original judgment.

This also means the debtor has a financial incentive to pay sooner rather than later. In demand letters and debtor examinations, pointing out how quickly the balance is growing can motivate settlement.

Interest Continues During Enforcement

Interest accrues continuously regardless of what enforcement tools you are using. It runs during the 10-day waiting period before you can file for garnishment. It runs while you wait for a debtor examination hearing. It runs during wage garnishment. It does not pause unless the court issues a specific stay of execution.

If the debtor files for bankruptcy, the automatic stay under 11 U.S.C. § 362 halts collection activity. Post-petition interest on a pre-petition unsecured claim is generally disallowed in bankruptcy under 11 U.S.C. § 502(b)(2).

The Rate Is Fixed

Hawaii's 10% rate is set by statute and does not fluctuate with market interest rates. It applies to all money judgments regardless of the underlying claim type — contract disputes, property damage, security deposit cases, or anything else adjudicated in the Small Claims Division.

Our Hawaii Judgment Collection Guide includes pre-built interest calculation worksheets and payment application ledgers so you can track exactly what the debtor owes at any point.

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