4 Things To Know If You've Never Taken A Case To A Small Claims Court

Business Articles

If your business has a customer that owes a lot of money and won't pay, you have options of how to handle collecting this money. One of the best options is taking this customer to small claims court. If you've never done this before, there are things you will need to know. Having the right information will help you with your case, and hopefully your customer will end up paying the money he or she owes. Here are four things you need to know about small claims.

You May Not Be Able To Have A Lawyer

Some states do not allow lawyers in small claims courts, but others do. If your state does not allow you to have a lawyer, you could still meet with one ahead of time. This is a great way to get legal advice about your situation and develop a strategy for the courtroom.

If your state does allow lawyers, you may not want to get one simply because of the costs. Hiring a lawyer is not always the most cost-effective way of collecting a debt in small claims court, especially in states with limits.

The Debt Must Fall Below The State Limit

Every state has a limit on how much you can pursue through small claims. These amounts range from $2,500 to $15,000. If the customer owes you more than the limit in your state, you will not have the option of using small claims court. The only way you could is if you reduced the amount the person owed. For example, if your state limit is $5,000 and the person owes you $5,500, you could use small claims court if you dropped the balance owed to $5,000.

If you choose this route, you will not be able to collect the remaining balance of the debt. If the court rules in your favor, this amount will be all you will ever be able to collect.

You Must Have The Right Evidence

Small claims court is similar to other types of courts in one way: you must have enough evidence to prove that the other party is guilty. To do this, you will need to gather all the evidence you have and begin preparing it. This may involve bringing the following documents with you to court:

• The contract you had with the customer
• Invoices of goods or services sold to the customer
• Copies of all demand letters sent to the customer
• A log of all phone calls made to the customer to collect the money
• Copies of bounced checks
• Surveillance films of the customer purchasing goods from you

You should bring anything you have that backs up your side of the case and make sure your information is legible, organized, and accurate.

A Ruling Doesn't Automatically Give You The Money

The final thing to understand about small claims court is that a ruling in your favor will not automatically mean that you will get the money the person owes you. While you have a better chance of collecting the money, the person is not likely to bring money to the court hearing. Because of this, you may encounter problems trying to collect it.

A ruling in your favor is in your favor though. Court-ordered payments that are not paid can lead to consequences to those that owe the money. The judge may give the defendant a certain amount of time to pay, but if he or she doesn't pay the money by then, you may have to take the person back to court.

When doing this, the court could impose penalties, consequences, and punishments to the person that failed to abide by the court order.

Taking a person to small claims court is a great way to settle an outstanding debt. To learn more about this, call the small claims court or other collection service in your area.

14 July 2015