Small Claims Court | How-to Guides for running your business from Business.com

Small claims courts provide consumers and small business owners with a means of resolving disputes quickly for a relatively small amount of money. If a customer owes you money, a company fails to provide you with the services you contracted or your property has been damaged, you may have a case for small claims court.

If you do decide to go to court:

Be prepared. When you go to small claims court, you're representing yourself. Attorneys are typically not involved in such small cases, so it's up to you to provide all the relevant correspondence — contracts, invoices, warranties, etc. — that backs up your case.
Know the statute of limitations. Most states have a set deadline or maximum period of time in which a lawsuit or claim may be filed. These deadlines vary by state and type of claim. If your case is not filed before the statutory deadline, you may forfeit your right to sue.
Check the small claims limit for your state. Maximum amounts you can seek in small claims count vary between a few thousand to about $10,000.
Keep it simple. The procedures in small claims courts are much more informal than in other types of litigation. You need only explain why you are filing a claim.

Action Steps
The best contacts and resources to help you get it done

Find the small claims steps and procedures for your state

Each state has different deadlines and procedures for seeking payment through small claims court.

I recommend: Click your state at the ConsumerAffairs.com small claims state-by-state guide. You'll find information on dollar limits, where to file, deadlines, appeals and more.

Get small claims guidance online

Most states offer their own guides to small claims courts providing information about their individual rules and requirements.

I recommend: A good place to start is the Small Claims Guide at ConsumerAffairs.com.

Take the right steps

Your claim must generally be filed in the county in which the party being sued resides or does business, or in the district where a contract was signed or other business was conducted. Your county clerk's office will provide you with a "plaintiff's statement" to file your claim, usually charging a small fee of $10 to $50. You are also responsible for notifying the party you're suing about the lawsuit. The county court will usually notify the defendant for you via certified or registered mail, or you can hire a process server.

I recommend: Many state bar associations provide a guidebook to take you step-by-step through the small claims court process. You can find a list of state bar associations at FindLaw.com.

Prepare your case

Be as prepared as you can. Gather all relevant documents that back up your case. Be organized and have your answers ready for the judge. If you have witnesses to your claim, ask them to appear in court on your behalf. Make sure you get to court on time and try to relax as much as possible.

I recommend: For advice on preparing your case, see "Everybody's Guide to Small Claims Court" from Nolo Press or Small Claims Court Basics at AllBusiness.com.

If you win

If the case is decided in your favor, the court will issue a judgment for a specific sum of money. Unfortunately, winning a judgment does not guarantee you will collect. In many states, the judge has the power to order the defendant to pay you in installments if it is clear the defendant cannot afford to pay the full amount in a lump sum. If the individual refuses to pay, you can apply to the court clerk's office for an execution to be issued against the defendant's wages, property or bank account.

I recommend: The State of New York's Web site provides a thorough guide on what to expect from small claims court and how to collect if you do win a judgment. Other states' guides listed on the National Center for State Court's Web site provide additional advice.

Tips & Tactics
Helpful advice for making the most of this Guide

Before filing a claim, do your best to settle out of court. Write a demand letter outlining the issue and the reparations you are seeking. Send the letter via certified mail, return receipt requested, and keep a copy to show the judge if you do wind up in court.
Make sure you actually have a case. If you can't prove you've been harmed or if there are no damages, you can't win in a small claims court.
You must know the full legal name of the person or business you are suing, along with their address and telephone number and any other pertinent information you can provide in order to notify them of the complaint and, in necessary, collect a judgment.
If you incur extra expenses when trying to collect your money, you are entitled to collect these costs, with interest, in your judgment.

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