What would you do if a business not only failed to deliver what they promised but also kept your money? What would your options be if a neighbor damaged your property and refused to pay up? Lawyers are expensive and court cases can take a lot of time and emotional energy. Luckily, small claims court is a relatively quick and inexpensive way to seek compensation.
A small claims court typically handles cases involving comparatively small amounts of money. These courts are only allowed to hear cases where the asserted damages are less than a certain monetary amount. While what is considered a small claim will vary from state to state, in almost all states small claims are under $25,000.
While almost every state has some sort of small claims court in operation, there are no equivalents at the federal level. This is because the Federal Government will not typically have jurisdiction in cases involving amounts of damages this small. Small claims courts are courts of law, unlike popular television programs such as Judge Judy and Judge Joe Brown, which are courts of arbitration.
Small claims courts operate under different sets of rules than other courts. For example, they typically have lower standards of formality. Evidence rules are typically relaxed. Most small claims courts do not have juries, only judges who make a binding decision.
These differences exist because the prevailing thought is that individuals should be able to represent themselves in cases involving comparatively low sums of money to avoid the expense of having a lawyer represent them. This can reduce the cost of litigation by many thousands of dollars.
It also gives the opportunity for any wronged party to bring litigation, no matter how much they were damaged monetarily. Small claims courts also operate in a manner that allows legal cases to end within a much shorter time frame than other courts. Matters can be resolved in small claims courts in weeks or months, rather than the years that other courts can take. On a more practical side, small claims courts also free up other courts to pursue more complex and contentious litigation.
The process for filing a claim in small claims court is different in every jurisdiction. Most will require you to fill out a set of forms at the courthouse where you intend to file the claim. Most of the forms will be simple; however, you must be very careful, honest, and accurate with whatever you write down.
It is advisable to look up jurisdictional requirements before you do so. While states will allow you to file a claim in any small claims court within the state, others have more complex requirements. For example, you may only be able to file a claim in the county where you reside, where the defendant resides, where the action that caused you damage occurred, or some combination of those.
Matters can become even more complex when the person whom you are suing resides in a different state. This may lead to your case being handled in federal courts which can be very expensive and time consuming. You will need to weigh the time and money involved against how much you could possibly hope to gain before making the decision to go this route. Many attorneys offer free consultations that will help you understand your options and the costs involved. You can also call 211 in most areas to find out about any legal aid clinics in your community.
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Small claims is only good if the person actually pays the judgment you get against him/her; it is not a guarantee that you will get your money. Sometimes you need to turn it over to a collection agency, who will charge a percentage to collect damages for you because the court does not collect the money you have been awarded. Small claims Court isn’t perfect, but you can use it to get a judgement; then you need to get it enforced.
Also, make sure you check the collection procedures. If you win your case and obtain a judgement, each state has different laws on how and what you can collect. In some states, such as Texas, most judgments are just pieces of paper that get filed of record and can get picked up on credit reports. Unless you know the persons banking information or they have non-exempt property that can be picked up and sold by the contable, there isn’t much you can do to collect your money.