Court Basics for Smaller Amounts

Introduction: We are very lucky in that we get so many cases presented to our law firm that we only take cases we believe will be successful. However, sometimes we do not take on cases because we believe the amounts desired are so small that it would benefit a person to use a different avenue to effectuate their interests although they have a meritorious case. Frankly, why would a person spend $5000-$10000 or more when they are only asking for $7500? It makes no sense. See below to learn the basics of the small claims court system.

Question: Dear Attorney Cheng, I have heard in the US there is a Small Claims court system. What is it? Can you explain it to me? George – Arcadia

Answer: George, your question is extremely vague. However, I will try to explain the small claims court system. Small Claims is a system for smaller lawsuits. Essentially, it allows a person that wants to sue for under $7500 to represent himself in Court. (Attorneys are not allowed to represent people in small claims court). Note, if you are a corporation you are limited to $5000.00. You can file as many claims as you want for up to $2,500 each. But you can only file 2 claims in a calendar year that ask for more than $2,500. The filing fees are cheap. (The highest being $75.00). It is also very quick. Most cases are decided within 20 to 70 days. If you are the plaintiff and you lose you cannot appeal. However, any defendant can appeal an adverse judgment.

Question: I was owed $2000.00 and my former partner in small claims court and won! However, now that I have my judgment what do I do? The person is still not willing to pay me. Sara – San Marino

Answer: Sara, congratulations! I am so proud of you for using the court system to get the monies owed to you. We will go over the general points of how to collect your money. First, know that the court will not collect the money for you. But the court will issue the orders and other documents required to force the debtor to pay. Enforcement of the judgment is put off until the time for appeal expires (30 days after entry of judgment). If an appeal hearing is held, the judgment can be enforced after the superior court's judgment is sent back to the small claims court. Judgments are enforceable for 10 years and are renewable for another 10 years and then renewable after that. Normally, the Court will send out a document to have the debtor fill out what property and assets he has. However, this usually does not occur and a Debtor Exam must occur. A Debtor Exam requires the debtor to go to court to answer questions. The hearing will require the debtor to state what type of property they own, where that property is located and whether or not the debtor has a job. You then can file liens on property and seek to garnish wages. Note also that you can collect against wives and domestic partners of the debtor. Also, debtors that refuse to pay also get their credit affected because the credit reporting bureaus go to courthouses to find out who are debtors that have refused to pay.

Conclusion: The Small Claims Court system is a great way for the average citizen to get their needs meet. I wish all of you the very best and Happy Holidays!

Categories: Business Law