Illustration of small claims court documents

Want to be a lawyer without going to law school? Get a little practice with small claims court.

I have been a credit manager in the construction industry for over 16 years, and I would love to file claims. Give me a balance too small to file a lien or foreclose on, a bad check, or a prompt payment or trust fund claim, and I would jump all over it.

I always got to say “I get to be like an attorney without ever having to go to law school.” Typically, states do not allow attorneys in small claims, so the only person there to defend your claim would be your customer and/or an agent for their company.  It is such an amazing learning experience that I have always recommended to my peers and teams to try, just once, and then they’d be hooked.

Before making a decision to file a claim in small claims court, you need to make sure that you can prove your case and “win.” The person who wins doesn’t necessarily have all their documents in a row;  you need to present your case as if you are trying to make friends with the judge.  The judge typically awards the victory to the person they believe, appreciate, and yes, “like.”

Questions to help determine if you should go to court

Who are you filing the case against?

In order to file the claim, you have to know who is responsible for the balance. If it is a person, you need to know where they are located to serve papers on them.  The more difficult suits are the ones where there could be multiple defendants.  

If it is a company, you have to determine what entity it is. Once you determine their entity, you are able to find out whom you need to service.  Be sure to check your state’s requirements, as you want to be sure to file suit against everyone responsible, in one claim.

Is your case worth filing?

First, research the Statute of Limitations in the state where you will be filing the suit. Many states have different requirements, and you want to be sure you follow the correct state. 

Then, the top thing you should look at when reviewing if your case is worth filing is where the venue is.  Typically your contract andor application will specify a venue beneficial to your company. However, if you don’t have one, then you need to file where the defendant is located or where material was delivered (if this is in regards to construction). 

In filing the suit, some defendants will go to mediation or try to settle the case.  This can be preferable to avoid additional costs, but would ultimately be your decision.  You will need to ensure you meet the statutes on how much time has passed since the balance became due and how much you are allowed to bring to court.  The maximum claim in most states varies from $5,000 – $10,000.  

Information to support  your claim is of the utmost priority!  Be sure to get everything in writing, including a copy of the initial contract and/or credit application, and anything else that shows the debt is valid.  

Additionally, if you can find a witness to support your claim, be sure to bring them on the date of court.

What are the costs associated with filing a small claims suit?

You will want to review your specific statute of limitations again for your state, but typically, the cost for filing a claim in small claims can save you a lot of money because you don’t have to pay an attorney.  Typically there are minimal costs:

  • Fees to file your case (filing fee typically around $75-$100)
  • Fees to process service on your defendant (typically around $50 per defendant)

Further reading: File a Lien or Go to Small Claims Court?

What happens after the claim is filed?

Once you file the claim, you then have to wait typically 30-45 days (depending on the state) for the defendant to be served.  

Then, the defendant has two options once served: either ignore the claim with no response, or file a response/defense. 

Having a defendant ignore the claim and not file a response is how I’ve won probably 80% of suits filed. This is an awesome situation. When a no-response happens, all you have to do is contact the court and ask to schedule a hearing to secure a default judgment.

If the defendant does file an answer, you can respond to their answer, or call the county clerk and ask them to schedule a hearing.  

How to prepare for your day in court

The court process can be intimidating, but it is very easy to learn.  My first case I learned by fire: At that time, there weren’t a lot of help or tips out there in the world. I will provide some  steps below, however, for your first time, I suggest calling the court and talking to the small claims advisor, or even going to a small claims court session and watching how others do it. 

As long as you have all your ducks in a row, your day in court will be a breeze.  Here are some must-have tips and actions that you need to follow when getting ready to present in court.

  • Create three files in manila folders: One for the plaintiff (originals), one for the defendant (copies) and one for the Judge (copies). Everything should be included in the files: credit application, contract, order, anything in writing or signed for, copy of partial payments, invoice copies and a statement of the account. The more the better to prove your case. 
  • Talk to witnesses. These are people that have any knowledge of the situation and/or the balance.  Be sure to ask any key witness to write a declaration, or go with you to the hearing.
  • A picture is worth 1,000 words! Collect photos  showing key information. Check the defendant’s Facebook and LinkedIn — sometimes they post stuff they don’t even realize could be helpful to your case.
  • Plan your wardrobe ahead of time. It needs to be business formal and professional; showing respect to the judge is of utmost  importance.  Be sure to wear closed toed shoes, and make  your hygiene is tip-top, making you look put together.
  • Be prepared: Practice what you’ll say  in court to yourself or to someone else to hear how you present. Anticipate the defendant’s response. Practice being respectful: “Your Honor” is how you should always answer and address the judge.

What happens during small claims court?

Once you are in court, take a seat.  The court clerk will call out your name before the judge enters the court, be sure to respond stating you are there.  When your case is called, you and your witness go to the plaintiffs table.  Do not sit until the judge says “be seated.”

As  the plaintiff, you will be asked to present your case. Take the file you made for the judge and hand it to the clerk — but do not leave your desk, they will come to you. This will be presented as evidence. 

Be sure you give your most important points first, when you are asked to speak.  Make sure you explain how you got to the balance outstanding.

Once you are finished presenting your case, there are a couple things that could happen next:

  • If the defendant didn’t show, present your case, and then state that you are asking for a default judgement.  
  • If the defendant does show, they will then have their turn to present the case.  Stay quiet and do not interrupt. You will give time to respond to what they say, but wait your turn.  
  • After both sides have presented their case and evidence has been viewed, the judge will render their decision.

If you win your case, you will have to wait at least 30 days before you can enforce your judgment.  During this time, the defendant can file an appeal.  You then will have to wait for the judge to make a decision on the appeal before you can take any legal action. 

If you lose, unfortunately you have to accept it and possibly write the outstanding balance to bad debt.  

Keep in mind that the judge has final say, even if you are 100% owed the money. If the defendant presents a better response, acts more respectful, or the judge just doesn’t like you,  they can make a decision against you.

Collecting on your judgment

After the decision, the case isn’t over.  You still need to collect your money.  Keep in mind that these options vary by state, so be sure to check your state’s law.

Before you can proceed with payment efforts, you will need to get a Writ of Execution from the court.  Once you have this document in hand you can then decide what avenue you want to pursue.

Different options are:

  • Filing a property lien on any assets and/or real estate the defendant has. You’ll want to locate what county it is in, and file the Writ of Execution with the county clerk in that county.  This will put a lien on their property.
  • File for a bank levy if you know which bank the defendant has an account with.  You will need to go back to the county clerk for the bank levy and all necessary documents will garnish any money that is in any account they have with that bank. Child support or tax payments are exempt.
  • One of the easiest ways to collect your money is a wage garnishment. The court will issue a demand to the defendant’s employer to withhold money out of his paycheck, up to 25% each check.

Alternatives to small claims court

Personally, I have always loved going to small claims court. Nine  times out of ten, the defendant doesn’t even show up to court, so you automatically get a default judgment, if requested. However, it is also a great learning experience, and teaches you not only how to present yourself, but what backup and information you need to make sure you have when you sell to a customer in case they don’t pay.

However, if you decide small claims isn’t the best course of action, or if you fear you might not win your case, there are other options.

Maintain some sort of communication with your customer and try settling for a lesser amount — getting paid something is sometimes better than nothing at all.

Research different online dispute resolution venues. This is an online service where you and the debtor will present their sides to a mediator and work on a settlement through an impartial third party.

Read more: Guide to Alternative Dispute Resolution (ADR) in Construction

As a company, you can report the balance to a credit bureau and/or business reporting agency. Just keep in mind you have to report your entire customer aging; you are not able to pick and choose between accounts.

One last action you can take — and sometimes you may want to do this sooner than later — but turning your balance over to a collection agency may be able to get a response when you’ve been unable to. These agencies have training, strategies, and tactics you may not feel comfortable with or want to utilize.

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