Just So You Know: Small Claims Court

Small claims court—often called magistrate court—is the court of last resort. When you have a disagreement with a business or individual, and you can’t come to a resolution, you can sue in small claims court. TrustDALE uses records form small claims court as a way to investigate businesses before we certify them. If a business is being sued a lot in small claims court, and especially if they are losing, that’s a red flag. Here’s what you need to know about small claims court.

It’s Great for Small Sums of Money

The amount of money you can recover in small claims court is capped at about $10,000 to $15,000, depending on the state. But if you have been taken advantage of for an amount of money that falls in that range, small claims court could be your last opportunity to get that money back.

One feature of small claims court that makes it accessible to everyone is the low filing fees. Again, the fees vary by state but tend to range from $15 to $200. That’s not a large investment for the opportunity to win back thousands of dollars.

The Judge Really Wants to Avoid a Ruling

In small claims court, you may show up to court, and the judge is not even a real judge. Sometimes, small claims court is overseen by a court official who is appointed to deal with small claims cases. The appointed adjudicator is supposed to listen to both sides, and they are supposed to be reasonable. But in many cases, they really want to avoid making a ruling.

The small claims court judge will do their best to get the two sides to work something out between them. Come prepared for that, and stay adamant that you want an actual ruling. If you have gotten to the point of suing a business, the chances are good that you have tried to work things out, and you were unsuccessful.

You Need Documentation

Anyone can claim that a business has taken their money and failed to provide the goods or services they promised. But without documentation, it’s just your word against the business, and that’s not enough for a ruling in your favor.

We often stress the importance of documenting every interaction with a business. First, make sure that you have a contract in writing. A handshake and a promise are very hard to enforce. Without a contract, either party can try to change the deal, and there is no proof of what the agreement was in the first place. If you are having problems with a business, try to communicate in writing. Use email or regular mail, so that you have a written record of your interactions. Keep all receipts, work orders, and any other paperwork you may receive. If you have to interact over the phone, try to record the call. In most states, only one party has to agree to the recording, and that’s you. Also, keep a written record of what goes on during a phone call and what was said,

You Might Be Up Against a Lawyer

Some businesses may be sophisticated enough to send a lawyer to court in their stead. So you won’t have the opportunity to make your claim against the business owner. One common tactic is to send a lawyer to court and have that lawyer ask for a delay in the case. A lawyer can ask for a delay multiple times. The goal of the delays is to get the plaintiff to give up on their claim. If you think you have a real claim, don’t be deterred by delays, but be prepared for them.

You Can Win and Still Not Get Paid

After all the evidence is presented, and the two sides argue their cases, you may get a judgment in your favor. But a judgment alone does not mean that you will get the money you were awarded.

To get money from a business that has lost a court case, you need to get a lien on their property. That requires going to the sheriff’s office, presenting documentation of the judgment in your favor, and requesting a lien on real property. But if the defendant has no property, there really is no way to force them to pay the money you were awarded. The court record will show a judgment against them, but you won’t get your money back. So before you go to small claims court, it may be worth investigating what property a company has, so that you don’t waste your time on a judgment that can’t be enforced.