Georgia: Prejudgment Interest Rules

The short answer

Georgia doesn't just use different rates for contract and tort claims — it uses entirely different procedures. A liquidated debt (an amount already fixed or certain, like an unpaid invoice or a note) earns interest automatically from the day it became due, at the state's 7% legal rate, with no notice or demand required. An unliquidated tort claim — most personal injury and property-damage cases — earns nothing unless the plaintiff takes an affirmative, specific procedural step: sending the defendant a written demand by certified or registered mail. If the defendant doesn't pay within 30 days, interest starts running at the prime rate plus 3%, but only if the final judgment meets or beats the amount actually demanded. A claim against the State of Georgia itself is different again: no prejudgment interest at all, by explicit statute.

Requirements one by one

Governing law

Georgia's rule for liquidated contract debts is O.C.G.A. § 7-4-15, a short statute dating back to the state's earliest interest laws, which draws its rate from the general legal-rate statute, § 7-4-2. Tort claims for unliquidated damages run on a completely different, more recent statute: § 51-12-14, formally titled the "Unliquidated Damages Interest Act," which creates a demand-and-response procedure that has no equivalent on the contract side. A claim against the state skips both of these and instead runs into an outright statutory bar in the Georgia Tort Claims Act, § 50-21-30.

Interest rate

A liquidated contract demand draws interest at Georgia's legal rate, 7% a year, simple interest, unless the parties' own contract sets a different rate. An unliquidated tort demand under § 51-12-14 uses a completely different formula: the prime rate published by the Federal Reserve Board (per its H.15 statistical release), as of the 30th day after the written demand notice, plus 3 percentage points — a rate that's set once for that claim rather than reset annually.

When interest starts running

For a liquidated debt, interest starts from the date the party became "liable and bound to pay" — or, if the debt is payable on demand, from the date of that demand (a demand note is presumed demanded instantly). For an unliquidated tort claim, nothing starts running until the plaintiff sends a written demand by certified or registered mail specifying that it's made under § 51-12-14; if the defendant doesn't pay within 30 days, interest then runs "from the thirtieth day following the date of the mailing or delivering of the written notice until the date of judgment" — but only if the eventual judgment is for at least the amount demanded. Fall short of your own demand at trial, and none of that interest is collectible.

Contract vs. tort claims

These aren't just different rates on a shared framework — they're different legal mechanisms entirely. A liquidated contract debt needs no notice, no demand letter, and no showing that the defendant did anything wrong; interest is baked into the nature of an unpaid, fixed debt. An unliquidated tort claim needs an affirmative, correctly executed written demand before any interest right exists at all, and the interest is contingent on winning at least as much as was demanded. A tort plaintiff who never sends the statutory demand notice, or whose eventual verdict comes in under the demand amount, recovers no prejudgment interest whatsoever.

Mandatory or discretionary

Once a contract debt is shown to be liquidated, prejudgment interest isn't a matter of judicial discretion: Georgia's Court of Appeals has held that it "is not premised on bad faith but on the principle that when a debt is owed and the demand for funds is made, interest accrues from the time entitlement attaches," and that an award under § 7-4-15 "is mandatory rather than discretionary ... and is awarded by a judge as a matter of law." The tort-side mechanism under § 51-12-14 is also mandatory once its conditions are met — the demand notice was properly sent, went unanswered for 30 days, and the judgment meets or exceeds the demand — but getting there requires the plaintiff to have taken that specific procedural step in the first place.

Simple or compound

Georgia's default legal rate is defined in the statute itself as "7 percent per annum simple interest," and neither the tort-side demand-interest statute nor the separate postjudgment-interest statute (§ 7-4-12) provides for compounding. All of Georgia's prejudgment and postjudgment interest mechanisms discussed here are simple interest.

Claims against the government

Georgia bars prejudgment interest against the state outright. The Georgia Tort Claims Act — the limited statutory waiver of sovereign immunity that lets someone sue a state agency or state employee for a covered tort — says plainly that "no award for damages under this article shall include punitive or exemplary damages or interest prior to judgment." There's no good-faith exception, no liquidated-demand exception, and no demand-notice workaround: prejudgment interest is categorically off the table for a claim covered by that Act, whether the underlying claim would otherwise have been liquidated or unliquidated.

Other exceptions

The § 51-12-14 demand mechanism includes its own escape valve for defendants: if, after the initial 30 days, the defendant sends a written counter-notice offering to pay the demanded amount plus interest accrued through that date, and the plaintiff doesn't accept that offer within a further 30 days, no more interest accrues past that point even if the plaintiff ultimately wins more at trial. The statute also keeps the existence of the demand and any interest calculation away from the jury entirely — the court adds it to the judgment only after the verdict comes in, and only once it's satisfied the statutory procedure was actually followed. A narrower, separate rate applies to certain open or commercial accounts under § 7-4-16, a claim-type outside this survey's scope.

What trips people up

The biggest trap on the tort side is assuming interest runs automatically the way it does for a contract debt. It doesn't — a personal injury plaintiff who never sends the specific § 51-12-14 demand notice by certified or registered mail gets no prejudgment interest at all, no matter how clear liability was or how long the case took.

The demand-notice mechanic cuts both ways and needs precision: the notice has to specify that it's being given under § 51-12-14, has to actually be sent by registered or certified mail (or statutory overnight delivery), and the interest clock only runs if the final judgment comes in at or above the amount actually demanded. Demand too high and the jury awards less, and the plaintiff gets no interest despite winning the case.

The government exception is easy to overlook in a case involving both a private company and a state entity for the same incident: the private defendant can end up owing prejudgment interest on its share of the judgment while a state co-defendant owes none at all, since the Tort Claims Act's bar applies regardless of whether the claim would otherwise have qualified.

Common questions

Is Georgia's prejudgment interest rate 7%?
Only for a liquidated contract demand under § 7-4-15, where 7% is the default legal rate absent a different contract rate. An unliquidated tort claim instead uses the prime rate plus 3% under a completely different statute, § 51-12-14.

Do I automatically get interest if I win a car accident case in Georgia?
No. You have to have sent the defendant a written demand for a specific amount by certified or registered mail, under § 51-12-14, and the final judgment has to be at least that amount. Without that demand, there's no prejudgment interest on a tort verdict.

Can I get prejudgment interest on an unpaid invoice or note?
Yes, and it's essentially automatic once the debt is shown to be liquidated (a fixed, certain amount) — Georgia courts award it "as a matter of law," not based on whether the defendant acted in bad faith.

Can I get prejudgment interest if I sue the State of Georgia?
No. The Georgia Tort Claims Act expressly excludes interest prior to judgment from any award covered by that Act.

Statutes and sources

• O.C.G.A. § 7-4-2(a)(1)(A) (legal rate of interest) — "The legal rate of interest shall be 7 percent per annum simple interest where the rate percent is not established by written contract." Accessed 2026-07-05: https://law.justia.com/codes/georgia/title-7/chapter-4/article-1/section-7-4-2/
• O.C.G.A. § 7-4-15 (liquidated demands) — "All liquidated demands ... bear interest from the time the party shall become liable and bound to pay them; if payable on demand, they shall bear interest from the time of the demand." Accessed 2026-07-05: https://law.justia.com/codes/georgia/2020/title-7/chapter-4/article-1/section-7-4-15/
• O.C.G.A. § 7-4-12(a), (c) (postjudgment interest) — judgments bear interest at the Federal Reserve prime rate plus 3%, fixed on the day judgment is entered, applied automatically. Accessed 2026-07-05: https://law.justia.com/codes/georgia/title-7/chapter-4/article-1/section-7-4-12/
• O.C.G.A. § 51-12-14(a), (c), (d) (Unliquidated Damages Interest Act) — the demand-notice procedure, prime-plus-3% rate, and jury-exclusion rule quoted in full above. Accessed 2026-07-05: https://law.justia.com/codes/georgia/title-51/chapter-12/article-1/section-51-12-14/
• O.C.G.A. § 50-21-30 (Georgia Tort Claims Act) — "No award for damages under this article shall include punitive or exemplary damages or interest prior to judgment." Accessed 2026-07-05: https://law.justia.com/codes/georgia/title-50/chapter-21/article-2/section-50-21-30/
• Rivergate Corp. v. Atlanta Indoor Advertising Concepts, Inc., 210 Ga. App. 501 (1993) — held that § 7-4-15 interest "is not premised on bad faith" and "is mandatory rather than discretionary ... awarded by a judge as a matter of law." Accessed 2026-07-05: https://www.courtlistener.com/opinion/1229805/rivergate-corp-v-atlanta-indoor-advertising-concepts-inc/