Interest begins on the day the final judgment is entered. If partial payments are made, those payments are first applied to the accrued interest and then to the unpaid principal.
To calculate the interest, first determine the daily amount of interest. For example, a $10,000 judgment accrues $1,000 of interest per year at a rate of 10 percent. Dividing $1,000 by 365 days gives you a daily interest rate of $2.73. Now, assume that after 145 days the debtor pays you $2,000. The following computation shows the amount of interest that will accrue after that payment is made:
After 145 days, $395.85 (145 days x $2.73/day) of interest will have accrued on the $10,000 judgment. Out of the debtor’s $2,000 payment, pay yourself the accrued interest first. You then will have $1,604.15 left ($2,000 - $395.85 = $1,604.15). Now credit the remaining $1,604.15 against the $10,000 judgment ($10,000 - $1,604.15 = $8,395.85 of unpaid principal). The new daily interest will then accrue at a rate of $2.30/day ($8,385.85 x 10% = $839.58 ÷ 365).
Assume, then, that 215 days later a $750 payment is made. During the 215 days, $494.50 (215 days x $2.30/day) of interest will have accrued. Out of the $750, pay yourself the accrued interest first ($750 - $494.50 = $255.50) leaving $255.50 to apply to unpaid principal. Now credit the $255.50 against the remaining judgment principal of $8,385.85, and we find that $8,130.35 remains unpaid. The new daily interest will then accrue at a rate of $2.22/day ($8,130.85 x 10% = $813.03÷ 365).
Interest ceases to accrue when the money judgment is satisfied in full pursuant to a writ as of the date of levy if payment is received in a lump sum.
If the money judgment is satisfied pursuant to an earnings withholding order (wage garnishment), the interest ceases to accrue on the date of issuance of the final earnings withholding order. [CCP §706.028]
If the money judgment is satisfied pursuant to a writ on the date the proceeds of sale or collection are actually received by the levying officer.
In cases where a money judgment is satisfied other than by a writ, interest ceases to accrue on the date the judgment is satisfied in full.
On a money judgment that is partially satisfied, interest cease to accrue as to the part satisfied on the date the part is satisfied.
To determine the date of satisfaction or partial satisfaction in a non-writ situation the court looks to the earliest time of:
For more information, read California Code of Civil Procedure sections 685.010 to 685.030 .