How Partial Payments Are Applied to a North Dakota Judgment

Partial Payments Do Not Reduce Your Balance the Way You Expect

When a judgment debtor in North Dakota makes a partial payment — voluntarily or through garnishment — the money does not go straight to reducing the principal. N.D.C.C. § 28-20-36 mandates a specific application order, and ignoring it means your ledger is wrong and your enforcement requests will cite the wrong balance.

The Statutory Payment Order

Every dollar received on a North Dakota judgment is applied in this sequence:

1. Taxable post-judgment costs — clerk fees, sheriff service fees, garnishee fees, mileage, and other enforcement expenses you advanced
2. Accrued post-judgment interest — simple interest calculated from the judgment date at the statutory annual rate (10% for 2026 judgments, under N.D.C.C. § 28-20-34)
3. Unpaid principal balance — whatever remains after costs and interest are covered

You cannot change this order by agreement, and the debtor cannot direct their payment to principal first. The statute controls.

Why This Matters Financially

The allocation order means the principal balance decreases more slowly than most creditors expect. Interest continues accruing on the full principal until the partial payment actually reaches the principal tier.

Here is a concrete example:

Judgment entered January 15, 2026: $10,000 principal + $202 in court costs. The 2026 statutory interest rate is 10% per annum.

July 15, 2026 (181 days later): interest has accrued to $495.89 ($10,000 × 0.10 ÷ 365 × 181). The debtor pays $2,000.

Applying the statutory order:

• $202.00 goes to taxable costs → costs fully satisfied
• $495.89 goes to accrued interest → interest fully caught up
• $1,302.11 goes to principal → new principal balance: $8,697.89

That $2,000 payment only reduced the principal by $1,302.11. From July 16 forward, interest accrues on $8,697.89, not on $8,000.

December 31, 2026 (169 more days): interest accrues another $402.73 ($8,697.89 × 0.10 ÷ 365 × 169). The year-end balance is $8,697.89 in principal plus $402.73 in unpaid interest — a total of $9,100.62 still owed.

Multiple Partial Payments

When the debtor pays in installments — or when wage garnishment sends a check every pay period — each payment goes through the same waterfall. If costs are fully covered, every subsequent payment splits between interest and principal. Because interest accrues daily, the exact split depends on the date each payment arrives.

This is why keeping a ledger is not optional. Each line should record:

• Date of payment
• Gross amount received
• Amount applied to costs (if any remain)
• Amount applied to interest
• Amount applied to principal
• Running principal balance
• Running interest balance

The Interest Rate Locks at Entry

One detail that trips people up: the statutory interest rate that applies to your judgment is the rate in effect during the calendar year the judgment was entered, and it stays the same for the entire life of the judgment. If your judgment was entered in 2026 at 10%, it accrues at 10% even if the State Court Administrator sets a different rate for 2027. The rate does not fluctuate.

This makes your ledger calculations straightforward — the daily rate is always the same: principal × annual rate ÷ 365.

Recording Payments Correctly Protects You

If the debtor disputes the remaining balance, your ledger is the evidence. It also matters when you eventually file a Satisfaction of Judgment — you need to confirm that the total of all payments equals the original judgment plus all accrued costs and interest.

If you apply payments incorrectly and file a Satisfaction of Judgment too early (before the judgment is truly satisfied), you have released your enforcement rights on a balance that still exists. If you refuse to file it when the debtor has actually paid in full, they can file a motion to have the court declare satisfaction.

For a full walkthrough of interest calculations, enforcement cost tracking, and the payment application formula with worked examples, see our North Dakota judgment collection guide.

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