Indiana Small Claims Court Interest Rate on Judgments

The Statutory Rate: 8% Per Year

Once a judge enters a money judgment in an Indiana small claims case, interest starts accruing on the unpaid balance. Indiana Code § 24-4.6-1-101 sets the default rate at 8% per annum — that's simple interest calculated from the date the judgment is entered on the court's Chronological Case Summary (CCS) until the judgment is paid in full.

On a $5,000 judgment, that works out to $400 per year, or roughly $1.10 per day. The longer the judgment sits unpaid, the more it grows. After two years of nonpayment, that $5,000 judgment becomes $5,800 before you factor in the court costs the judge also assessed.

This rate applies to judgments in both systems — the Circuit and Superior Court small claims dockets across Indiana's 91 counties ($10,000 jurisdictional cap) and the nine Marion County township small claims courts ($8,000 cap). Filing an appeal does not by itself stay enforcement; under Indiana Appellate Rule 39, a stay requires an order. Interest otherwise accrues on the unpaid judgment until it is satisfied.

When a Contract Rate Overrides the Statute

The 8% statutory rate applies when the parties did not agree on a rate in the original contract. If they did, Indiana Code § 24-4.6-1-101 sets post-judgment interest at the agreed rate, capped at 8% per year—even if the contract allowed a higher rate before judgment. A contractor agreement with a 12% late-payment clause, for instance, could carry that higher rate before judgment; after judgment, the rate is capped at 8%.

Pre-judgment interest is a separate question. Whether it applies depends on the contract, the claim, and applicable Indiana law; it is not the same automatic 8% post-judgment rule.

How Interest Affects Your Total Obligation

If you lost a small claims case and owe money, here's what makes up the total amount due:

1. Principal judgment — the amount the judge awarded
2. Court costs — filing fees and service charges the judge assessed to the losing party
3. Post-judgment interest — 8% per year on the unpaid judgment, or the agreed contract rate subject to the 8% post-judgment cap

Keep receipts for partial payments and ask for an updated balance showing how each payment was credited.

The creditor can pursue the full amount — principal, costs, and accrued interest — through Proceedings Supplemental under Trial Rule 69. That's the mechanism for wage garnishment, bank levies, and court-ordered payment plans.

Stopping the Interest Clock

Interest accrues until the judgment is satisfied. To pay it in full, include the principal, costs, and accrued interest through the payment date. Under Small Claims Rule 11(D), once paid in full, the creditor must file a satisfaction or release of judgment with the clerk.

If you can't pay the full amount at once, a court-ordered installment plan under Small Claims Rule 11(C) structures your payments but does not stop interest from running. The interest continues to accrue on the unpaid balance until it's fully satisfied.

Settling the judgment for less than the full amount is possible if the creditor agrees. Put the terms in writing and make sure the court record is updated when you complete them; a private agreement alone does not show that the judgment has been satisfied. Many creditors will accept a reduced lump sum rather than wait years for full payment plus interest through garnishment.

The Indiana Small Claims Response Guide covers the full post-decision process, including how interest is calculated on your specific judgment amount and how to negotiate a payoff that stops the meter.

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