A Texas judgment is more than the principal balance. Post-judgment interest accrues from the date of judgment until the debt is paid. Recoverable costs pile up over the life of enforcement. Attorney’s fees are sometimes recoverable on the underlying claim and sometimes on the post-judgment work. How each piece accrues, and how they interact, affects both the realistic recovery on a matter and the client’s decisions at the points where settlement is on the table.
This page is our working framework. It is general information. Specific calculations are matter-specific and depend on the judgment’s terms and the applicable statutes.
Post-Judgment Interest Under Texas Finance Code Chapter 304
Post-judgment interest in Texas is governed by Texas Finance Code Chapter 304. The Texas Office of Consumer Credit Commissioner publishes the rate periodically.
The general rule. For most money judgments, post-judgment interest accrues at the rate set by Chapter 304. The rate is tied to the prime rate published by the Federal Reserve, with statutory floors and ceilings, and it has been adjusted from time to time as the underlying prime rate has moved.
Contractual interest rates. Where the underlying contract specifies an interest rate, the judgment can carry that rate as post-judgment interest, but capped at 18% per year, the statutory ceiling under Texas Finance Code § 304.002. The judgment itself typically specifies the applicable rate.
Computation. Post-judgment interest accrues from the date of judgment until paid, and it is typically computed as simple interest unless the judgment says otherwise.
Effect on the running balance. On a judgment that goes unpaid for several years, accrued post-judgment interest can become a substantial part of the total balance. A six-figure judgment outstanding for five years can accrue tens of thousands of dollars in interest, depending on the applicable rate.
We track post-judgment interest on each matter and provide current balance accountings on request.
Pre-Judgment Interest
Pre-judgment interest is recoverable in many matters too. The rates and the way it is computed depend on the type of claim:
Statutory pre-judgment interest under the Texas Finance Code applies to certain claims, accruing at a statutory rate from a statutory measurement date.
Common-law pre-judgment interest applies to other claims, with the rate and start date set by case law for the specific claim type.
Contractual interest may apply where the underlying contract specified pre-default interest at a stated rate.
The judgment itself typically specifies the pre-judgment interest awarded. We carry that pre-judgment interest forward into post-judgment enforcement as part of the balance.
Recoverable Costs
Texas allows recovery of certain costs from the losing party. Common ones include:
Court costs. Filing fees, citation issuance fees, fees for issuing writs (garnishment, execution, sequestration), and other court-related fees.
Service fees. Constable’s fees and private process server fees for serving process and writs.
Deposition costs. Court reporter fees, transcript costs, location fees.
Sheriff’s and constable’s fees. For execution and seizure work.
Other taxable costs as defined by court rules and applicable case law.
Costs accrue throughout the litigation and the post-judgment work. They are recoverable as part of the judgment and add to the running balance.
Non-recoverable costs. Some of what we incur is not recoverable from the debtor, most notably our own attorney time on matters where attorney’s fees are not recoverable, and certain investigation costs that fall outside the recoverable-costs definition. Those stay the client’s expense regardless of recovery.
Attorney’s Fees Under Texas Civil Practice & Remedies Code Chapter 38
Chapter 38 authorizes recovery of attorney’s fees on certain claims. The categories most relevant to commercial collection:
Suit for rendered services. Fees recoverable on claims for services performed.
Suit for performed labor. Fees recoverable on claims for labor performed.
Suit for furnished material. Fees recoverable on claims for materials furnished.
Suit on a sworn account. Fees recoverable on accounts for goods sold and services rendered.
Suit on an oral or written contract. Fees recoverable on contract claims, including loan contracts.
To recover under Chapter 38, the creditor must:
- Be represented by an attorney
- Present the claim to the debtor (typically by demand letter)
- Allow at least 30 days for payment from the date of presentment
- Not receive payment within that 30-day period
The demand letter we send at the start of most matters is built to satisfy these requirements.
Amount of fees recoverable. The court awards reasonable and necessary fees, supported by affidavit testimony from us. The amount is typically substantial: for matters that go to summary judgment or trial, recoverable fees can run to tens of thousands of dollars. The court decides reasonableness based on case-specific factors.
Effect of fee recovery on the matter’s economics. When Chapter 38 fees are recoverable, the creditor’s effective cost of pursuing the matter drops substantially. The fees the creditor pays us are often offset by the fees recovered from the debtor, sometimes producing net-positive economics for the creditor.
Attorney’s Fees Outside Chapter 38
Attorney’s fees may also be recoverable in specific contexts outside Chapter 38:
Contractual fee provisions. Where the underlying contract (note, security agreement, loan document) provides for recovery of attorney’s fees on enforcement, those fees are typically recoverable based on the contract terms. Many lender documents include broad attorney’s fees provisions that reach post-judgment enforcement.
Specific statutes. Various Texas statutes provide for fee recovery in specific contexts, including (for relevant collection matters) certain construction-related claims under Property Code Chapter 53, prompt-payment statutes under Property Code Chapter 28 and Government Code Chapter 2251, and various other specialty statutes.
Federal law. Some federal statutes (the Truth in Lending Act, certain consumer-protection contexts) provide fee recovery in specific situations.
We identify all applicable fee-recovery bases at intake and plead them in the petition.
Post-Judgment Attorney’s Fees
A question that comes up: are attorney’s fees for post-judgment enforcement work recoverable separately from the fees recoverable on the underlying judgment?
The general rule:
Where the underlying contract provides. Where the underlying contract (note, security agreement) explicitly provides for attorney’s fees on enforcement, including post-judgment enforcement, those fees are typically recoverable as the post-judgment work is done.
Under Chapter 38. Chapter 38 itself does not specifically provide for additional post-judgment fees beyond those awarded in the original judgment, though some courts have allowed additional fees in specific circumstances.
Through specific motion practice. For specific post-judgment proceedings (turnover, contempt), additional fees may be available based on the statutory or common-law authority for the proceeding.
We track recoverable post-judgment fees and pursue recovery where appropriate.
How the Running Balance Looks
A typical commercial collection matter that goes to judgment and then into post-judgment enforcement builds a running balance over time:
At judgment: Principal + pre-judgment interest + court costs + Chapter 38 attorney’s fees (where applicable) = total judgment amount.
Through enforcement: Post-judgment interest accrues from the judgment date forward; additional court costs and post-judgment expenses are added; where applicable, post-judgment attorney’s fees are added.
At settlement or recovery: The total balance the debtor owes is principal + pre-judgment interest + judgment costs + Chapter 38 fees + accrued post-judgment interest + post-judgment costs + post-judgment fees. The recovery is applied per the judgment’s allocation rules.
For matters that run several years before producing recovery, the total balance can substantially exceed the original principal. That is one reason early enforcement beats deferred enforcement: the running balance grows, but the debtor’s collectability often does not, and a very large judgment against a debtor with limited assets is still capped by what the debtor can actually pay.
Settlement and the Running Balance
When settlement is on the table, the running balance is part of the math. A few practical points:
Settlement at less than the full balance. Most judgment settlements come in below the full balance. The discount reflects the time value of money, the cost of continued enforcement, the bankruptcy risk, and the realistic limit of what the debtor can pay.
Allocation of the settlement payment. When the judgment is satisfied for less than the full balance, how the payment is allocated among principal, interest, costs, and fees affects several downstream issues: tax treatment, lien release, future enforceability. We structure settlement language to address allocation appropriately.
Lien release. Settlement typically requires us to release abstracts of judgment that have been recorded. The release is contingent on receipt of settlement funds.
Future-balance preservation. Some settlement structures preserve the right to pursue a future-balance amount if the debtor’s circumstances change. Most settlements release the entire judgment in exchange for the negotiated payment; some structured settlements preserve future rights conditionally.
We provide settlement analysis on a matter-specific basis.
Track the Total Picture
The principal of a judgment is only part of the picture. Interest, costs, and recoverable fees materially affect both the running balance and the matter’s economics.
For matters in active enforcement, we track the running balance and provide accountings on request. For matters where settlement is being evaluated, we provide analysis that covers every component of the recovery picture.
Contact us to get started or call 214-368-4686.
Related Pages
- I Already Have a Judgment
- Collecting Judgments in Texas
- Realistic Recovery Timeline & Expectations
- Settling for Less Than the Full Judgment
- Reviving a Dormant Judgment
- Texas Collections Law FAQs
Interest, Costs, and Fees FAQs
What's the current Texas post-judgment interest rate?
The rate is published periodically by the Texas Office of Consumer Credit Commissioner under Finance Code Chapter 304. It is tied to the prime rate with statutory floors and ceilings. Confirm the current rate at any given moment; we track it on each matter.
Does post-judgment interest accrue on the entire judgment amount or just the principal?
Under Chapter 304, post-judgment interest typically accrues on the entire money judgment, including the awarded fees and costs. The specific application depends on the judgment's terms.
How does interest compound?
Texas post-judgment interest is typically computed as simple interest unless the judgment specifies otherwise.
Can I add my collection costs to the judgment?
Recoverable costs (filing fees, service fees, deposition costs, sheriff's and constable's fees, and similar taxable costs) are added to the judgment as incurred and recoverable from the debtor. Non-recoverable costs (our own time on matters without attorney's fees authorization, certain investigation expenses) stay the client's expense.
Are attorney's fees always recoverable?
No. Chapter 38 covers most contract-based commercial collection matters, but the requirements (representation by an attorney, presentment, the 30-day window) have to be met. Other statutory and contractual bases for fee recovery apply in specific contexts. We identify the applicable bases at intake.
What happens to interest if the debtor files bankruptcy?
Pre-petition interest is generally part of the underlying claim filed as a proof of claim. Post-petition interest is generally not allowed against the debtor's bankruptcy estate, except for fully secured claims to the extent of the security and a few other narrow exceptions. Post-bankruptcy interest may resume on portions of the claim that survive bankruptcy through non-dischargeability, or against non-bankrupt parties.
Can I waive interest as part of a settlement?
Yes. Settlement structures often allocate the payment in ways that effectively waive interest, costs, or fees. The allocation is part of the negotiation.
How does the firm calculate the running balance?
Through tracked spreadsheet calculation that applies the appropriate interest rate from the judgment date forward, adds costs as incurred, and applies any payments per the allocation rules. We provide current balance accountings on request.
What if the judgment didn't specify pre-judgment interest or attorney's fees?
We review the judgment and what it actually awarded. Where amounts that should have been awarded were not, we sometimes pursue post-judgment relief to address the omission. More often, we work with what the judgment provides and structure enforcement around it.
Will the firm's fees on post-judgment enforcement be recoverable?
Sometimes, depending on the underlying contract terms, the specific motion practice, and the applicable statutes. We track recoverable post-judgment fees and seek recovery where appropriate. For matters where post-judgment fees are not recoverable, the client pays us hourly (or under the matter's contingency or other fee structure) without recovery from the debtor for that post-judgment work.