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What to Know About Taking a Debtor to Small Claims Court

If someone owes you money, and you’ve already tried to collect payment by contacting the individual by phone, email or mail a number of times, you may benefit from filing a case against that person in small claims court.

In small claims court — or a local county or city courthouse that does not require legal representation to have a claim heard and decided by a judge — different rules apply according to state. Every state has its own limit to how much money you can claim. For instance, in Tennessee, the most you can ask for is $25,000, while in Kentucky, you can only seek $1,500 in small claims court. However, in most states you can ask to collect between $3,000 and $5,000.

Still, going through the small claims process isn’t automatically a good idea if somebody owes you money and hasn’t paid you, cautions Dan Nguyen, a business attorney in Fountain Valley, California. “You can’t get blood from a turnip, so think about whether they can pay,” he says. “There are two major parts to any lawsuit: whether you can win or not, and whether you can get money or not. If you win and can’t get any money, that’s kind of like not winning at all.”

[Read: Wage Garnishment: What Is It and How Can It Impact Your Income?]

On the other hand, if you think your debtor will have enough money to pay you in the future, you may want to sue and collect the money later on, Nguyen explains. “Some attorneys will do judgment enforcement and split the collections with you, without any money out of pocket to you.”

Before you decide to take somebody to small claims court, review these tips to get through the process successfully.

How to File a Small Claims Action

There are a variety of steps to take before you walk into a courtroom. You’ll need to fill out a complaint form, sometimes called a “statement of claim” — and you must do this with the county clerk in the small claims court district that is closest to where the person or business you are suing is based. Your county clerk’s office can tell you how to get your statement of claim to the defendant, but generally you’ll work with a sheriff or private process service to deliver the document. Keep in mind that costs will vary depending on where you live, but you can expect to pay between $45 and $75.

Other Costs to Consider

You’ll also have to pay a filing fee, which can be anywhere from $15 to $100, depending on what state you live in and how much money you’re trying to collect. For instance, in California, you’ll need to pay $30 if you’re pursuing up to $1,500, $50 if you’re looking to collect up to $5,000 and $75 if you’re trying to collect up to $10,000. Though every state is different, your court date will likely be within 60 days. Also keep in mind, often times the threat of small claims court is enough to get a debtor to settle a case, and so you may end up not having to go to court at all.

You might also want to take into account that you’ll lose work time by going to court. “Typically you don’t get money for lost wages. Depending on the state, you won’t get any money for the time you spent going to court if you have a day job and lost pay,” Nguyen says.

[Read: Should You Pay Someone to Deal With Customer Service Issues for You?]

One fee you generally won’t pay for is an attorney. Many states do allow you to bring a lawyer to small claims court, but some states, like California, Michigan and Nebraska, do not. But that’s the thing about small claims court: Most people go to small claims court if they’re owed $10,000 or less, and the cost of hiring a lawyer is usually too cost-prohibitive, especially when you factor in travel costs and lost wages.

How to Prepare for a Court Case

There are several things to consider and strategic steps to take to prepare your case, experts say.

Keep your emotions in check. “Be friendly,” suggests Jeremy Rovinsky, a judge pro tem at the Maricopa County Justice Courts in Phoenix. He is also the dean of National Paralegal College in Phoenix. It may seem like a no-brainer, but in court, it’s critical to be mindful of your manners and keep emotions at bay for the best outcome.

“A lot of small claims court is he said, she said, and it is impossible for the judge to know exactly who is telling the more correct version of the story,” Rovinsky says. “Often, the person who is more respectful — not just to the judge but also to the other party — is the one who leaves the better impression to the judge; the one the judge will ultimately trust more.”

Along those lines, Rovinsky cautions against presenting yourself as unreasonable. “I don’t like to see a party who appears stubborn and difficult; it gives me the impression that he or she was also difficult and unreasonable at the time of the dispute.”

Dress professionally and refrain from using legal jargon. “Usually, this means a jacket and tie for men and will subtly show the judge and the court that you respect the rule of law and the judicial process,” Nguyen says. Speaking of respect, “address the judge as ‘Your Honor,'” he says.

Other than “Your Honor,” don’t try to pretend that you’re starring in an episode of “Law & Order.”

“Don’t try to sound like a lawyer,” Rovinsky advises. “It just annoys a judge when a non-lawyer tries to use legalese and fancy legal terms. If you are asked a question, just answer it honestly and in a straightforward way. In small claims matters, I don’t want you to use legal terms, especially if you don’t quite understand them. You tell me the facts, and I will apply the relevant law.”

Be prepared. Gather any paperwork that you think a judge would need to see. For instance, you may want to submit emails or registered letters, invoices or contracts that you sent as proof that you tried to collect the money you’re owed before going to court.

“Many times, people don’t think about the fact that the judge presiding over their case has little knowledge about their situation. They don’t know the relationship between you and the defendant, they don’t know the story on why you two are here today,” says Melissa Breyer, an Atlanta attorney who has her own general law practice called The Hive Law.

It’s your job to tell the judge, Breyer says, but you want to have thought out how you’re going to explain why you’re owed money in a way that’s easy to understand.

[See: 8 Financial Steps to Take After Paying Off a Debt.]

“Judges are making tons of decisions all day, every day,” Breyer says. “The faster you can get to the point while highlighting what you seek in damages — thus making it even easier for the judge — the better off you’ll be in their eyes.”

As for how your case will be resolved, it will depend on the judge and state, but generally you’ll receive the results of your case in the mail. And when it comes to collecting the money you’re due, you may need to hire a collection agency to chase after your debtor even after going to court, though the threat of being taken to small claims court may compel a debtor to pay up.

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What to Know About Taking a Debtor to Small Claims Court originally appeared on usnews.com



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