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By Valerie S. Johnson
Perhaps your neighbor’s dog bit you, and you’re stuck with the hospital bill. Or you’re a contractor and the homeowner won’t pay for the remodeling work you completed. Or you had a minor fender bender, and you’d rather resolve it privately than make an insurance claim. If you can’t settle your differences with the other person, it may be time to have your day in Small Claims court.
A Small Claims action is a civil (not criminal) matter that resolves disputes about relatively small amounts of money. Each state has different laws about what “small” means. In many states, you can sue in Small Claims court only if the amount you are claiming is less than $5,000. However, in other states, it can be as high as $7,500. If more dollars are involved, you’ll have to play in the big leagues in the other courts.
The first step is to do everything possible to get your differences resolved before setting foot in a court room. It will always be less expensive to settle a dispute without getting involved in the legal system. First, you must make a demand in writing. Send a letter to the other person or company that clearly spells out why you think they owe you money, how much you are claiming, and how you calculated that amount. If you have any evidence to support your claim — for example, a hospital bill, estimates, receipts, etc., include copies. Never send the originals with your letters or to a court.
In your letter, be very specific about what you want the other person to do, and give them a reasonable time to do it. For example, “To resolve this matter, please send me a certified check or money order for $350 within the next ten days.” You don’t need to threaten to sue if they don’t comply, but do include a statement with words to the effect that “I reserve all legal rights and remedies available to me.”
Send your letter by certified mail, return receipt requested. This costs a bit more than just a $.39 stamp, but it is crucial to prove that someone signed to receive your letter. Keep a copy of your letter and any enclosures.
If the allotted time passes and no check has turned up in your mailbox, send a second letter. Attach a copy of the first letter you sent, including the attachments. Give them another chance to pony up with the money, perhaps within seven days. Include words to the effect that you hope to resolve this matter amicably but if not, you will be forced to pursue your claim in Small Claims court. Send this letter certified mail, return receipt requested, and keep a copy.
Let’s say you don’t receive the money and the rogue has called your bluff. It’s time to consider whether you want to file a claim in Small Claims court. Before you try your best imitation of the “Boston Legal” lawyers, there are a few things to consider. Do you have the time to do all the necessary paperwork and research? Will you be able to clearly explain your side of the story to the judge? Are you likely to win? How much will it cost you to win? How much will it cost you if you lose? How much will it cost you if the defendant cross-claims and wins? (This means that the defendant says she doesn’t owe you any money, but instead you owe her.) If you win, can you collect your money? Does the defendant have assets or will he or the company file for bankruptcy?
The best way to save money on a straightforward Small Claims law suit is not to hire an attorney. Otherwise, you may end up spending more on your legal bills than the amount you are trying to recover. In fact, in some states, you are not allowed to be represented in court by an attorney, although you can get legal advice about your case.
If you decide to proceed, you have to figure out where you can sue. Each state has different rules, but usually, you can sue in the state if the defendant lives, works or does business there, or if the incident took place there. Most states have a website with all the information and the form you need to complete (often called a “Complaint” or “Statement of Claim”) and the instructions for filing. If not, the clerk’s office may be able to answer any administrative questions you have. They can’t, however, give you any legal advice. Do not delay in filing because each state has “Statutes of Limitations” for claims. This means if you wait too long to sue (usually a few years) you may lose, no matter how good your case is.
You need to be able to write and speak about your problem clearly and have sufficient evidence to support your claim. Most claims are that the defendant did or did not do something and it cost you money. On the form, after the dollar amount you are claiming, write “plus costs and interest.” This may allow you to recover the amount of your filing fees and interest while you wait to collect the money if you win. Forget about pain and suffering; Small Claims courts generally don’t award these types of damages.
You have to pay a fee for filing your law suit. You didn’t think it was going to be free, did you? This is why everyone says litigation is expensive. The filing fees for Small Claims are generally low, ranging between $5 and $100, depending on the laws of the state. You also have to arrange and pay for the defendant to be served with your claim.
When the defendant receives the Summons, he realizes you were not making idle threats. You mean business. This may prompt him to send the check to get rid of the matter. Nobody wants to go to court. If so, then it has only cost you the amount of the filing fee, service fee, photocopying, and postage. This is the best result.
However, the defendant’s reaction may be to do nothing. She may not even turn up in court on the fateful day of the trial. You, however, must appear in person or your claim will be dismissed and you will lose. Dress conservatively; you don’t want to look like one of those idiots who shows up in Judge Judy’s courtroom looking like they’re going to the beach. Bring all the relevant paperwork with you: copies of your demand letters with the supporting evidence, the “green cards” (evidence from the post office that someone signed to receive your letters), and a copy of the paperwork you filed.
Be prepared to tell your story succinctly. Stick to the basic facts. Don’t say mean things about the defendant.
Congratulations if you win! Unfortunately, winning a lawsuit can be a hollow victory. You’ve won your judgment, but now you have to enforce it and collect your money. Forget about getting help from the Small Claims court; their job ended when they gave you a judgment in your favor. It is your responsibility to take legal actions to collect on your judgment, and each state has its laws on that topic. The defendant also may have the right to appeal the Small Claims court’s decision.
The least expensive way to win in Small Claims court is to never go there. Try to work out your differences with the other person or company. Otherwise, you may end up spending a lot of time getting frustrated and throwing good money after bad.