How to Collect on a Debt in Small Claims Court

If someone owes you a relatively small amount of money, you can file a complaint to collect the debt in small claims court. This is usually quicker, cheaper, and more direct than filing your claim in a higher level trial court. You may want to consult with an attorney, but many small claims courts are designed to let you go through the process on your own so that you don’t spend as much on an attorney as you are trying to collect.

Part 1

Part 1 of 4:

Taking Preliminary Steps Before Filing a Case

1
Decide if small claims court is the best choice. Consider the complexity of the case and the amount of money involved. Small claims court is usually available for claims that are lower than a certain cutoff limit. Small claims court also is limited in the amount of discovery that you can do to gather evidence before a hearing or trial. If your case requires complicated discovery or involves a large amount of money, you may want to consider a different court.^{[1]XResearch source}
- You can use small claims court for many types of cases. For example, the return of security deposit or a payment dispute over broken or damaged property. Other cases involve breach of a written or verbal contract. In your case, figure out how much money you are owed and by whom.
- In some locations, small claims courts review evictions and other landlord-tenant matters.^{[2]XResearch source} If you're dealing with such issues, you will have to find out what the laws in your area are if you are trying to evict a tenant.
2
Consult a lawyer, if necessary. Most small claims courts are designed for you to be able to handle your case without a lawyer. Even so, if the case is complicated for any reason, or if the amount of money is large enough to justify it, you may want to hire one.
- In some small claims courts, lawyers are not allowed. You may still consult with a lawyer for advice about your case, even though you handle it on your own in court.
- Check with your local or state bar association for help in finding an attorney, if you believe you need one. You may also be able to take advantage of free consultation services that some bar associations offer.^{[3]XResearch source}
3
Send a demand letter to your defendant. This is a formal demand, putting the defendant on notice that you intend to collect. In your letter, you should identify the amount of money you are demanding, the reason for the payment, and a deadline for the defendant to make payment. You should state that if payment is not made by the due date that you set, you will be proceeding in court. ^{[4]XResearch source}
- In some courts, sending a written demand is a requirement. Without it, you are not eligible to file a suit. In other courts, however, you may go directly to court. In either type of court, a demand letter is a good idea, because it shows an effort to resolve the dispute without involving the court.
4
Mediate your dispute to try to resolve it without court. Mediation is a structured negotiating system that is designed to help you and the other party resolve your dispute without going to court. In mediation, both sides meet with a trained, impartial third party, who helps you talk about the debt and try to reach an agreement. Sometimes the solution may be a settlement for something less than the full amount, but if you want to avoid going all the way to court (where you could lose), that may be a good result. Mediation is also usually quicker than bringing a suit in court.^{[5]XResearch source}
- In some states, courts offer mediation as a free or low-cost service.
- Parties often share the cost of hiring a neutral mediator, which will vary based on the mediator and complexity of the case.
5
Try arbitration as another alternative to going to court. Arbitration is another system, similar to mediation, that allows you to try to resolve your dispute before going to court. It is generally a bit more formal than mediation and usually a bit more costly, but still more efficient than a trial. You and the defendant each present your case to an arbitrator, who then issues a ruling the way a judge would.
- Arbitration may be binding or non-binding. If you and the defendant choose binding arbitration, then you agree that the arbitrator’s decision is final, and you will not proceed to trial. With non-binding arbitration, you can see what the arbitrator awards, and if you are not satisfied with the decision, you still have the right to proceed to court.
- If you and your defendant would like to try arbitration, contact the court clerk's office. Some courts have their own arbitration panel already established. For example, the New York City civil court has a volunteer arbitration panel made up of trained lawyers who will arbitrate your dispute for free.^{[6]XResearch source}
6
Research your local laws regarding small claims cases. If you decide to take your claim to court, you should find out what the local rules are regarding small claims court. Many courts have maximum limits for the amount you can ask for in small claims court.
- For example, Alabama sets a fairly low limit of $3,000 for small claims cases. Other states, such as Tennessee, allow up to $25,000.^{[7]XResearch source}
- If you are seeking a higher amount than the small claims rules allow, then you have two options. You could reduce your demand so that you fit within the small claims limit, or you could file your case in a higher level trial court. If you choose to proceed in a higher level court, the filing fee will likely be greater, and the procedures will probably take longer. If you choose to take that option, you should consult with an attorney.
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Part 2

Part 2 of 4:

Filing Your Case in Small Claims Court

1
Decide where you will file your complaint. Usually, you will file a small claims case at the court that is nearest to you. However, there are rules that may control where you are allowed to file. Your case must generally be filed in the county where one or more of the following is true:^{[8]XResearch source}
- the county where the defendant resides
- the county where the debt was incurred
- the county where the business involved is located
- the county where the damage happened
- the county where the goods involved are permanently kept
2
Draft your complaint. A complaint is the statement in which you state your case and explain why you believe the other party owes you money, and how much you believe you are owed. You may need to write out the claim yourself, although many small claims courts simply have a form for you to complete.^{[9]XTrustworthy SourceState of MassachusettsOfficial website for the State of MassachusettsGo to source}
- The cost of filing a claim in small claims court ranges from around $15 to $200. Check with the court clerk to find out what form of payment (cash, check credit) is required.^{[10]XResearch source}.
- If you have any evidence to support your claim for money owed, such as a signed contract or receipt for services, you should attach that and file it with your complaint.
When you file your complaint, the clerk may notify you of a date for a hearing. Alternatively, some courts will provide notice of a date at some point in the future by mail to both parties. You should check with the court clerk so that you understand the system in your court.
4
Serve the defendant with the complaint and hearing notice. If you are in a court in which it is your duty to serve the defendant with the complaint and hearing notice, you will need to make sure to do this right away.^{[11]XResearch source} There are different methods for making service of a complaint and hearing notice. You will need to ask the clerk, or read the court rules, to find out the required system in your court.
- One method is to have someone who is over 18 years old and who is not a party to the case deliver the papers personally to the defendant. This may be a friend or relative, or anyone you choose.
- Another alternative is to hire a professional process server, sheriff or constable to serve the papers. This is a good idea if you think the defendant might try to avoid the service.
- A final option is to have the county clerk serve the papers by mail. In some courts, this may not be an available option. You will have to ask the clerk.
- When you file the complaint, you must serve the defendant right away. In many courts, you must provide at least a certain number of days’ notice before the court date. For example, in California, you must serve the court papers at least 15 days in advance of the court date. If the defendant is a person, business, or public entity outside of the county, you have 20 days.^{[12]XResearch source}
- If there are multiple defendants, then the rules of service apply to all defendants.
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Part 3

Part 3 of 4:

Proceeding with your Small Claims Case

If you have an opportunity, visit the small claims court before you have to appear for your hearing. Watch how the cases are conducted and learn what to expect when your case is eventually called.^{[13]XResearch source}
You are not likely to win a case simply by saying to the judge, “He owes me money.” You will need some evidence to show (a) that a debt is owed and (b) what the exact amount of that debt is. If you have a contract, bring the contract. If you have receipts, bring them. If you have copies of checks, or bank statements, or anything that specifically shows the amount of money involved, bring it. Originals are always best, but if you can only get photocopies, that will be better than nothing. The formal rules of evidence are relaxed a bit in small claims court.
If you believe that the testimony of witnesses is relevant to your case, try to get the witnesses to appear with you. You cannot tell the judge, “My sister heard the defendant promise to pay me $1,000,” if your sister is not there in court to speak for herself.
4
Prepare your presentation. Be as organized and direct as possible. Focus on the points that are related to your claim, without getting bogged down in irrelevant history. The judge will be better able to side with you if your presentation is clear and direct. Focus your presentation on a few key questions:
- What happened?
- How has it affected you?
- How much does the other party owe you?
- Why is the defendant at fault?
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Part 4

Part 4 of 4:

Collecting your Judgment

1
Make demand on the defendant. When you win a case in court, you do not automatically receive the money. What you get immediately is an order from the judge that the defendant owes you the money. You need to work with the defendant to collect.^{[14]XResearch source}
- Some defendants, after losing the case, will acknowledge that they owe the money and will readily pay you, to get the matter over with. You may just need to send a notice so the defendant knows where to send the money.
In some small claims courts, the court will keep jurisdiction of your case as long as the debt remains unpaid. If the defendant refuses to pay, the court may consider this a form of contempt and issue additional fines or even imprison the defendant until he or she agrees to pay.^{[15]XTrustworthy SourceState of MassachusettsOfficial website for the State of MassachusettsGo to source}
3
Get a writ of execution. In many courts, in order to enforce payment of a judgment, you need to get an order called a “writ of execution.” This is an additional order from the court that specifically orders your local sheriff to make certain collection efforts on your behalf.^{[16]XResearch source}
- To learn the procedure for getting a writ of execution, ask the clerk of the small claims court for the proper form to file.
4
Garnish the defendant’s wages. If the defendant refuses to pay voluntarily, and if he or she has a steady job, you can deliver the writ of execution to the local sheriff and ask the sheriff to garnish the defendant’s wages. The sheriff will deliver the writ to the defendant’s employer and order the defendant’s employer to pay a portion of the defendant’s pay check directly to you until the debt is fully paid.^{[17]XResearch source}
- State law generally sets limits of about 20-25% on the amount that you can get from a defendant’s pay check.
5
Attach the debtor’s bank account. In some courts, depending on the amount of money that the defendant has available in the bank, you can have the sheriff use your writ of execution to attachment the account. The sheriff will order the bank to remove the money and pay you to pay the judgment.
- To do this, you’ll need to know the name and branch address of the bank or other financial institution used by the defendant.
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Tips

The availability of collection options will depend on your state and county. Be sure to check with your county clerk and/or attorney to find out which options are available in your county.
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Rules for filing a case in small claims court vary between states and even counties. Before filing your case, be sure to check with your county clerk or an attorney to find out the rules in your state.
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Warnings

Be aware that some defendants might be "judgment proof." This is a term that means even though you won your case, the defendant has no assets to pay you, except property that is exempt under state law. Before you proceed with a lawsuit, even in small claims court, you should try to be sure that the defendant either has the money to pay you or has a steady job for you to collect from.
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Be alert to the possibility that the defendant might file bankruptcy after you win a judgment. If this happens, you are not allowed to continue your collection efforts. You are limited to filing a claim in the bankruptcy court, where your claim will probably be discharged.
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