New Mexico Judgment Interest Rate: How to Calculate What You're Owed
Every money judgment in New Mexico accrues interest from the date it is entered, and the court will not calculate it for you. When you file a writ of execution or garnishment, the application form requires you to state the exact interest owed down to the penny. Get it wrong and the clerk may reject your filing or the debtor may challenge the balance.
The Two Statutory Rates
NMSA 1978 § 56-8-4 sets two post-judgment interest rates:
8.75% per annum — the default rate for standard civil and contract judgments. This applies to most small claims money judgments where the underlying claim is a debt, unpaid services, property damage, or breach of contract.
15% per annum — for judgments based on tortious conduct, bad faith, or willful acts. If your judgment arose from fraud, intentional property damage, or similar willful behavior, the higher rate applies.
A third possibility: if the underlying obligation is a written contract that specifies its own interest rate, that contractual rate governs instead of the statutory default.
The statutory rates are simple interest, not compound. A written contract rate is governed by the instrument and the judgment.
The Calculation Formula
New Mexico uses simple interest computed on a daily basis:
Interest = Principal × Rate × (Days ÷ 365)
Where "Principal" is the unpaid judgment balance, "Rate" is the applicable annual rate (0.0875 or 0.15), and "Days" is the number of calendar days since judgment entry (or since the last payment was applied).
Worked Example
Say you won a $5,000 judgment on January 1, 2026, at the standard 8.75% rate. Court costs of $150 were awarded. On July 1, 2026 (day 181), the debtor pays $1,000.
Period 1 (Jan 1 – Jul 1, 181 days): Interest on $5,000 = $5,000 × 0.0875 × (181 ÷ 365) = $216.92
Total owed before payment: $5,000 + $150 costs + $216.92 interest = $5,366.92
Apply the $1,000 payment: Under standard accounting, payments go first to accrued interest ($216.92), then to costs ($150), then to principal. After the payment: $1,000 − $216.92 − $150 = $633.08 applied to principal. New principal: $5,000 − $633.08 = $4,366.92.
Period 2 (Jul 1 – Dec 31, 184 days): Interest on $4,366.92 = $4,366.92 × 0.0875 × (184 ÷ 365) = $192.54
Balance on December 31, 2026: $4,366.92 + $192.54 = $4,559.46
Tracking Payments Correctly
Partial payments must be allocated in a specific order: first to accrued interest, then to court costs and enforcement fees, then to reduce the principal. This is the standard post-judgment accounting rule in New Mexico. Every payment the debtor makes should be documented — record the date, amount, and how it was allocated.
Maintaining a running ledger is not optional. When you file your next enforcement writ, you must state the current balance accurately. If the debtor disputes your calculation at an exemption hearing or debtor examination, you need documentation showing exactly how you arrived at the number.
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When Interest Starts and Stops
Interest begins accruing on the date the judge signs the judgment and the clerk enters it on the docket. It does not wait for the 15-day appeal window to close or for any demand letter to be sent.
Interest stops accruing when the judgment is paid in full — not when the debtor files a satisfaction, but when the actual payment clears. If the debtor makes partial payments over time, interest continues accruing on the remaining balance.
Adding Interest to Your Writ Applications
Applications for execution and garnishment writs require the unpaid balance, accrued interest, costs, and payments to be calculated. The clerk issues the execution writ on Form 4-801; for medical-debt judgments, the execution application must comply with Form 4-805C. Form 4-805 is the garnishment application, with Form 4-805B for medical-debt judgments. Follow the transcript form's own instructions when requesting a transcript of judgment. If you understate the amount, you cannot go back and collect the difference easily. If you overstate it, the debtor can challenge your calculation.
The Collecting a Small Claims Judgment in New Mexico guide includes a pre-formatted interest calculation worksheet and payment ledger that handles both the 8.75% and 15% rates with proper payment allocation.
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