Judgment renewals and interest rates

A money judgment expires after 10 years unless it's renewed. A renewal extends how long someone can collect or enforce the judgment. During this time, any unpaid principal balance collects interest.

 

Typically, a judgment can be renewed multiple times for 10 years, with a 10% interest rate on any unpaid balance. However, some judgments for medical expenses or personal debt can only be renewed once for 5 years, with a 5% interest rate. 

Renewal length and interest rates

The side that's owed the money (the judgment creditor) has 10 years to collect, or enforce, a judgment. To extend how long they have to enforce a judgment, a judgment creditor can apply to have the judgment renewed. They must apply before the judgment expires. 

Unpaid balances collect interest while a judgment is active. When a judgment is renewed, that interest can be added to the balance owed. This is called compounding interest.

Generally, renewals last 10 years and the interest rate is 10%, but there are some exceptions

The general rule is that a renewal lasts 10 years. There is no limit on how many times a judgment creditor can renew the judgment. Any unpaid principal balance collects interest at 10%, or 7% if the debtor is a government agency.

This general rule applies to any judgment against a business or government agency, or when the debtor owes $200,000 or more. It also applies to any judgment where the money is owed due to a tort or fraud, or judgments for unpaid wages or other money due to an employee.

Broadly, a tort is when someone does something, usually dangerous or careless, and it causes someone to get hurt or damages something they own. For example, if someone runs a red light and causes a car accident. Common examples are assault, battery, trespassing, or negligence.

A tort is not when someone breaks a contract. For example, when someone signs an agreement with a credit card company, but then does not make a payment they agreed to make. That is called a "breach of contract". It is not a tort.

If the balance owed is less than $200,000 and the money owed is related to medical expenses or personal debt, then an exception to this rule may apply. Otherwise, the general rule applies.

Limits on renewals and interest rates for some judgments related to medical expenses or personal debts

As of January 1, 2023, a judgment can only be renewed once for 5 years if:

  • The side that owes the money (the judgment debtor) is a person, not a business or government agency,
  • The principal balance owed is less than $200,000 and related to a medical expense or is less than $50,000 and related to a personal debt, and
  • The money owed is not due to a tort, fraud, unpaid wages, or other money owed to an employee

If a judgment that meets the above requirements was renewed before January 1, 2023, then it cannot be renewed again. But the prior renewal will still last 10 years.

If a judgment that meets the above requirements is entered, or renewed, on or after January 1, 2023,  then the interest rate on any unpaid balance is 5%.

Examples to help you figure out what renewal length or interest rate applies if you got a judgment or are applying to renew it on or after January 1, 2023

  • Examples: Limitless 10-year renewals and a 10% interest rate
    • Judgment against a business, like a limited liability company or corporation
    • Judgment with a remaining balance of $200,000 or more
    • Judgment with money owed is due to a tort or fraud
    • Judgment for unpaid wages or other money due to an employee
    • Judgment for money owed related to medical expenses with a remaining balance of $200,000 or more
    • Judgment for personal debt with a remaining balance of $50,000 or more
  • Examples: 5-year, one-time renewal, and 5% interest rate
    • A judgment for personal debt, like credit card debt from buying household items, with a remaining balance of less than $50,000 
    • A judgment for a medical expense, like owing a hospital or doctor's office money for your care, for less than $200,000