North Carolina Post-Judgment Interest Rate: 8% Per Year on Small Claims Judgments

The Statutory Rate Is 8% Simple Interest

Under G.S. 24-1 and G.S. 24-5, money judgments in North Carolina generally accrue post-judgment interest at 8% per annum, simple interest, unless a lawful written contract rate applies. This applies from the date the judgment is entered, not from the date you originally loaned the money or the date the debtor breached a contract.

You don't need to request it. You don't need the magistrate to mention it in the judgment. It accrues by operation of law.

How the Math Works

Simple interest means the 8% applies only to the unpaid principal balance — interest does not compound, and interest is not assessed on court costs.

On a $5,000 judgment:

• Year 1: $5,000 × 0.08 = $400 in interest → balance $5,400
• Year 5: $5,000 × 0.08 × 5 = $2,000 in interest → balance $7,000
• Year 10: $5,000 × 0.08 × 10 = $4,000 in interest → balance $9,000

For a $10,000 judgment (the North Carolina small claims ceiling), 8% yields $800 per year. Over the full 10-year life of a judgment, the interest alone doubles the principal.

To calculate the daily rate for partial periods: divide the annual interest by 365. On $5,000, that's approximately $1.10 per day.

The Contract Rate Exception

If the underlying cause of action was based on a written contract that established a specific interest rate, the post-judgment interest rate matches the contractual rate rather than the statutory 8% — as long as the contract rate doesn't violate North Carolina's usury limits under G.S. 24-1.1.

This matters for business-to-business judgments where the original agreement specified a higher rate. For most small claims involving personal disputes, security deposits, or informal loans without written interest terms, the default 8% applies.

What Interest Applies To

Interest accrues strictly on the unpaid principal — the dollar amount the magistrate awarded. It does not apply to:

• Court costs (filing fees, sheriff service fees)
• Post-judgment enforcement costs (execution fees, transcript fees)
• Previously accrued interest

When partial payments are received, North Carolina accounting practice allocates funds in order: court costs first, then accrued interest, then principal. Once a partial payment reduces the principal, interest going forward is calculated on the reduced balance.

Why This Matters for Collection Strategy

The 8% rate is higher than most savings accounts and many bond yields. For a creditor deciding whether to pursue active enforcement or wait, interest changes the calculation.

If the debtor owns real property, a docketed judgment lien sits on that property for 10 years while interest accumulates. A $5,000 judgment becomes a $9,000 lien by the time the debtor tries to sell. The debtor often can't close without satisfying the judgment — and by then, the interest has substantially increased what they owe.

This makes the "wait and lien" strategy viable even when the debtor is currently cash-poor. The judgment grows every day without any additional effort from you.

Tracking Interest on Your Writ

When you fill out Form AOC-CV-400 (Writ of Execution), you'll need to calculate the interest accrued from the date of judgment to the date you're requesting the writ. Get this number right — the sheriff collects based on what the writ states, and an incorrect calculation can create disputes.

For guidance on building an accurate interest ledger and tracking partial payments, our North Carolina judgment collection guide includes a balance worksheet that handles the math.

See more North Carolina guides →