Before deciding whether to sue someone in small claims court, it’s important to understand the limitations and the purpose of this kind of court. First, you must understand the types of cases that you can file in small claims court:
- Small claims court can generally be used to resolve monetary disputes involving a variety of legal issues such as personal injury, breach of contract and other civil cases.
- Some states may also allow small claims court lawsuits for evictions, restitution of property, libel and slander, and false arrest.
- This court cannot be used to file for divorce, to file for bankruptcy, to request an injunction or to establish guardianship of a child.
Next, you must understand the limitations for the amount of money you can collect in small claims court. Small claims court can only be used to reclaim monetary amounts between $2,500 and $15,000. The amount varies by state; for example, the State of Kentucky limits small court claims to $2,500, while the State of Delaware allows claims of up to $15,000.
Finally, you must determine whether the person you are suing has the capability to pay you. For example, just because the judge declares you the "winner" does not mean you will collect the judgment. In fact, although many businesses and individuals are solvent and will pay, there are a certain number of defendants who are considered “judgment proof,” which means that they will not voluntarily pay you – either because they have no income or assets, or because they simply decide to hide the assets that they do have. And although there are some laws that will help you collect a judgment, there are also laws that will prevent you from seizing certain types of property.
Simple Steps to Filing a Small Claims Case
Let’s put aside the question of whether or not you can actually collect. The good news is that filing a claim in small claims court is actually quite simple and can be the quickest and easiest way to collect debts. With that in mind, let’s take a look at the steps you will need to follow to complete your small claim's court case.
- Identify the correct defendant, determine how much you are owed and send a demand letter. A demand letter is a written request for payment that clearly outlines what you are owed. In some cases, a demand letter may be enough to avoid going to court.
- If the demand letter is not sufficient to get payment, it’s time to research the small claim’s court process. This includes identifying where to file your claim and what forms you will need to complete. Talk to the small claims court clerks. They will not provide legal advice, but they can give you information about the procedures, the court jurisdiction in which to file your claim and the necessary forms to complete.
- Complete the proper forms. Although the procedures may vary by state or jurisdiction, if you are bringing the claim, you will need to complete a complaint, generally called a “Notice, Claim and Summons to Appear at Trial." Make sure you know who you are suing and the correct way to name the defendant.
- File the complaint and pay the filing fee.
- Serve the complaint on the defendant. Note that there are very specific procedures about how the complaint must be served, including whether it can be delivered by a private process server or sent via certified mail. It also must be served a certain number of days prior to the trial. After the defendant receives the complaint, they may decide to avoid court and simply pay.
- Assuming that the case is not settled prior to the trial, you will need to prepare your case. Get organized; this includes gathering any evidence you will need to prove your case, including receipts, checks, contracts or pictures.
- Win your case and receive a judgment against the defendant.
- Attempt to collect the judgment.
Getting Paid After a Small Claims Judgment
Unfortunately, even if you win your case, the court will not simply cut you a check for the amount owed. You will have to collect the judgment. Best-case scenario: The defendant will agree to pay and pay you either in full or through installment payments.
Otherwise, you will have to get what is generally called a writ of execution or a writ of attachment. This will allow the appropriate authorities to seize assets. This can include collecting money from the debtor’s bank accounts, seizing personal assets that are not exempt or placing a lien on real estate. A writ of garnishment can also be used to collect a percentage of the defendant’s wages.
Do I need to hire a lawyer for small claims court?
Claims can be filed in small claims court without hiring a lawyer. In fact, California, Michigan and Nebraska do not allow claimants to have legal representation. Other states allow it, but generally the cost to hire an attorney is too high given the limited amount of money that you are likely to collect if you win your lawsuit.