Small claims court can be a low-cost, effective way to collect on claims under $10,000. This entails filing a “notice of small claim” form with the district courthouse of the county where the debtor resides, where the contract was signed, or where the real property is. Call the appropriate courthouse, ask for the court clerk, and request the form (by fax or from the court website). Be sure to ask about the maximum amount you can file for because it varies by state. Some states have limits as low as $2,000. The court clerk also can help with questions about what to do, where to go, local laws and limits, what to file, when to show up, etc.
Filing fees are minimal, usually around $30, and the information required is also minimal. Upon receipt of your application, the small claims court clerk assigns a case number and trial date, usually within three to four weeks. You must provide a copy to the defendant at least 10 days before the trial, but you are not permitted to deliver these papers yourself. You must use certified mail, county sheriff, process server (listed in the Yellow Pages under “Process Servers”), or anyone over 18 who is not involved in the case. Certified mail is cheap and easy.
You must then file proof that the defendant was served with the notice. If the sheriff or professional process server delivers the notice, he or she completes a certificate of service and sends the original to the court on your behalf. If another person serves the notice, you must have that person sign an affidavit of service in front of a notary public. If the defendant is served by certified mail, file the return receipt as proof of service with the court clerk.
When you (or your representative) arrive at the courtroom, check in with the court clerk. When the case is called, you are sworn in along with the defendant and any witnesses. Explain your case and provide any relevant facts and witnesses. The defendant does the same. When both sides have been heard, the judge renders a judgment that is binding and has the full force of law as it allows for garnishment of wages or a lien on the defendant’s assets.
Steve Soule of Hall Estill provided his expertise for this article.
This article originally appeared in The Business Owner Journal, the periodical of choice for owners of small and midsize private businesses. All rights reserved, D.L. Perkins LLC. © 2012.
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