Judgment Interest Act Alberta: How Post-Judgment Interest Works
What the Judgment Interest Act Does
The Judgment Interest Act (RSA 2000, c J-1) entitles you to interest on your unpaid judgment from the date it was entered until the debtor pays in full. This interest accrues automatically — you don't need a separate court order to start the clock.
For creditors enforcing a judgment over months or years, the interest adds a meaningful amount to what the debtor owes. On a $25,000 judgment at 5%, that is $1,250 per year the balance stays unpaid.
How the Interest Rate Is Set
Post-judgment interest in Alberta is calculated as simple annual interest — it does not compound. The rate applied depends on whether the originating court specified a contractual rate:
Default statutory rate. If the judgment is silent on interest, the Judgment Interest Regulation prescribes the rate. The regulation sets rates that are updated periodically based on market conditions.
Contractual rate. If the underlying contract between the parties specified an interest rate and the court explicitly ordered that rate to apply post-judgment, the contractual rate governs instead of the statutory default.
Check the actual text of your entered judgment order. If it awards costs and says nothing about the interest rate, the statutory rate applies.
Calculating Interest on a Worked Example
Take a $25,000 judgment entered on January 15, with $1,500 in awarded court costs and $300 in initial filing and writ fees. The starting enforceable balance is $26,800.
At a 5% simple annual rate on the $25,000 principal:
- Year 1 accrued interest: $25,000 × 0.05 = $1,250
- Total owed at end of Year 1: $26,800 + $1,250 = $28,050
If a $3,000 garnishment payment comes in at the end of Year 1, the funds are applied in a strict order mandated by the Civil Enforcement Act:
- Enforcement costs first — $400 in taxable garnishment fees
- Accrued interest — $1,250 in accumulated interest
- Principal — the remaining $1,350 reduces the base
The adjusted principal after this payment is $23,650. That smaller number becomes the basis for the next year's interest calculation.
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Why the Allocation Order Matters
Creditors often assume partial payments come straight off the principal. They don't. Alberta's statutory allocation order means enforcement costs and interest are satisfied before any dollar touches the original judgment amount.
This has a practical consequence: early in enforcement, when costs are high and interest has been running, a modest garnishment payment may not reduce the principal at all. The principal shrinks only after costs and interest are fully covered.
Tracking this properly is important because the debtor's total obligation at any given moment includes principal plus accrued interest plus unreimbursed enforcement costs — not just the number on the original judgment.
Interest Stops When the Judgment Is Paid
Interest accrues until the judgment is satisfied in full, not until enforcement begins. If enforcement takes five years, the debtor owes five years of interest on the declining balance.
There are two situations where interest may stop or be modified:
- Court-ordered instalment plan. If the court grants the debtor a structured payment plan under Rule 10.50 or Section 17 of the Civil Enforcement Act, the terms may specify how interest accrues during the plan.
- Bankruptcy or consumer proposal. If the debtor files under the Bankruptcy and Insolvency Act, the stay of proceedings halts all enforcement, and interest accrues only according to the insolvency rules.
Keeping Accurate Records
Every partial payment needs to be allocated in the correct order and the running balance recalculated. The numbers matter if you ever need to file an updated affidavit in support of a garnishment, instruct a bailiff on the amount outstanding, or respond to the debtor's claim that the judgment has been overpaid.
The Alberta Judgment Enforcement Guide includes a creditor accounting ledger designed for this — a structured worksheet that tracks the principal, each enforcement cost, interest accrual periods and every payment received, with the statutory allocation order built in.
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