Post-Judgment Interest in Florida: How It Accrues and Why It Matters
TL;DR What is post-judgment interest in Florida and why should creditors care? Post-judgment interest is the interest that accrues on a money judgment in Florida from the date the court enters the judgment until it is paid. Florida law requires that every money judgment state an interest rate, and that rate is tied to the statutory rate set by the Florida Chief Financial Officer (unless a valid contract rate applies). That rate is adjusted over time, so your judgment can keep earning interest year after year until it’s satisfied. For creditors, post-judgment interest matters because it compensates you for the time you are forced to wait to be paid and gives debtors a financial reason not to drag things out with delays or appeals. Understanding Post-Judgment Interest in Florida What exactly is post-judgment interest? When a Florida court enters a money judgment in your favor, that number is not frozen in time. From the day the judgment is signed, interest starts to run on the unpaid balance. That extra amount is called post-judgment interest. It is different from any interest that may have accrued before the judgment was entered (prejudgment interest) and it continues to build until the judgment is paid in full. Florida law says that a money judgment “shall bear” interest and that the rate must appear on the face of the judgment. The rate stated in the judgment then accrues on the judgment until it is paid. The statutory rate is set under section 55.03, Florida Statutes, and judgment creditors are entitled to that interest as a matter of law, not as a courtesy. Who sets the rate and how often does it change? Florida’s post-judgment interest rate is not chosen by the judge or negotiated between the parties. Section 55.03 requires the Chief Financial Officer to calculate the judgment interest rate by looking at the Federal Reserve discount rate and adding a set number of basis points. The CFO does this four times a year and publishes a table of rates that apply to different quarters. A money judgment must list the applicable statutory rate, and that rate is then adjusted annually on January 1 based on the rate in effect on that date, until the judgment is paid. In practical terms, that means your judgment can pass through several different interest rates over the years it remains unpaid. In recent years, those rates have been in the high single digits to low double digits, and the CFO’s website and local clerk of court sites publish the current and historical rates so you or your counsel can calculate what is owed. How does this relate to contract interest? If the underlying contract or promissory note has its own valid interest rate, that rate may control instead of the statutory rate, so long as it complies with Florida’s usury and other applicable laws. In many commercial credit arrangements, the contract rate is equal to or higher than the statutory rate, so it can make a significant difference in the numbers. One of the first things we do when we review a file is look at the original documents to see which interest rules apply. The Cost of Ignoring Post-Judgment Interest What happens if you don’t track or enforce interest? It’s surprisingly common for creditors to win a judgment, celebrate, and then quietly leave thousands of dollars of interest on the table over the next few years. The judgment itself might be enforced, but nobody is consistently tracking the interest accruals or folding them into settlement conversations, payment plans, or payoff quotes. Here are a few of the problems that can show up when post-judgment interest is treated as an afterthought: - Understated payoff amounts. If your team gives a payoff quote that does not include accrued interest, you may end up accepting less than the law actually entitles you to recover. Once you sign a satisfaction of judgment based on that lower number, the missing interest is effectively gone. - Messy disputes with debtors. If your numbers keep changing because you are recalculating interest on the fly, debtors and their counsel may question your math or accuse you of overreaching. That can stall meaningful negotiations and, in some cases, trigger motion practice over accounting issues. - Lost leverage in settlement. Post-judgment interest is supposed to encourage prompt payment. If you never mention it and never include it in your calculations, the debtor feels less urgency to resolve the judgment and may see little downside to taking their time. - Internal confusion and extra workload. When nobody owns the interest calculation process, each payoff request becomes a mini research project. That wastes staff time and increases the risk of mistakes in busy collections departments. Over the life of a sizable judgment, especially at today’s interest rates, the difference between enforcing post-judgment interest and ignoring it can be very real money. Why Post-Judgment Interest Is a Built-In Advantage for Creditors How does interest help level the playing field? From the creditor’s point of view, post-judgment interest is about fairness. You extended credit or provided goods and services. The court agreed that money is owed. If you have to wait months or years for payment, it is only fair that the value of that judgment does not erode over time. Statutory interest keeps the judgment from going “backwards” while you are forced to wait. For debtors, the same rule works as a quiet nudge to get serious about payment. Every month they delay resolving the judgment, the balance slowly grows. That reality often becomes the tipping point in settlement discussions. A debtor might not be eager to pay the full judgment amount today, but the idea of paying more a year from now because of interest can push them toward a realistic plan now. What does this look like in real life? Imagine a $100,000 judgment that remains unpaid for several years. With statutory interest rates in the high single digits, the interest that accrues each year can equal months of revenue or profit for a typical Florida business. If you track and enforce that interest, the debtor knows the balance is not standing still. If you waive it without thinking, you may effectively be giving the debtor an interest-free loan. Handled well, post-judgment interest becomes part of a disciplined, businesslike collections strategy. It is not about punishing anyone. It is about aligning your recovery with the time value of money and using the tools Florida law already gives you. Making Post-Judgment Interest Part of Your Strategy What can you do this year to tighten up your process? You don’t need a complete overhaul to start treating post-judgment interest more intentionally. A few concrete steps can make a big difference: - Make sure your judgments state the interest rate. Florida law expects the judgment itself to show the applicable rate. If you are drafting proposed final judgments, double-check that the language is included and matches the correct statutory or contract rate. - Centralize your rate information. Keep a simple table or link handy to the CFO’s judgment interest rate page and any internal notes about contract rates. When a new judgment comes in, note the starting rate and set a reminder for the annual adjustment on January 1. - Standardize how you calculate. Whether you use a spreadsheet, practice management software, or a calculator built by your law firm, use the same method every time. And remember that partial payments are generally applied to interest first, then principal, before you recompute what is still owed. - Include interest in payoff quotes and negotiations. When a debtor asks “What will it take to pay this off?”, your answer should reflect both principal and accrued interest. You can always choose to compromise later, but you should start from an accurate, legally supported number. - Work with counsel who is comfortable with the math. A Florida creditors’ rights firm that deals with judgment enforcement every day can help design templates, double-check your calculations, and provide clear payoff figures you can rely on. When you treat post-judgment interest as part of your normal workflow instead of an afterthought, you protect your bottom line and reduce friction with debtors and their lawyers. Post-Judgment Interest in Florida – Common Questions When does post-judgment interest start and stop in Florida? Post-judgment interest starts on the date the court enters the final money judgment in your favor and continues to accrue on the unpaid balance until the judgment is paid in full or otherwise satisfied. If the case is appealed and the judgment is affirmed, interest normally continues to run during the appeal, which is one of the reasons Florida law recognizes post-judgment interest in the first place—to compensate the winning party for the delay in receiving funds. Who sets the post-judgment interest rate? The rate is set by the Florida Chief Financial Officer under section 55.03, Florida Statutes. Four times a year the CFO calculates and publishes the statutory judgment interest rate for upcoming quarters. For judgments that use the statutory rate, the court applies the rate in effect when judgment is entered and that rate is then adjusted annually on January 1 according to the CFO’s published rates until the judgment is paid. Local clerks and the CFO’s website maintain current and historical tables so you can see which rate applied in which year. Is post-judgment interest in Florida simple or compound? Florida’s statutory judgment interest is calculated as simple interest, not compound interest, unless a different, lawful method is clearly provided for in a contract that controls. That means you apply the annual rate to the outstanding balance for the relevant time period rather than charging interest on prior interest. The calculations can still be detailed because the applicable rate may change over time, but the concept is simple interest on the unpaid amount. How are partial payments applied between interest and principal? Under long-standing Florida case law and general interest principles, when a debtor makes a partial payment on a judgment, the payment is normally applied first to the interest that has accrued, and only after that is satisfied does the remainder of the payment reduce the principal balance. That rule matters because it prevents debtors from informally “freezing” interest by making small payments. If you are unsure how to apply a series of partial payments on a particular judgment, it is smart to have counsel run the numbers and document the calculations. Can the parties agree to a different interest rate? Yes, in many commercial cases the parties’ written agreement includes its own interest provisions. If a valid contract specifies an interest rate, and that rate complies with Florida’s usury and other applicable laws, courts often apply that contract rate to the judgment instead of the statutory rate. That is another reason it is important for creditors to keep executed contracts and promissory notes handy—those terms follow the case all the way through judgment and enforcement. Read the full article