Lawyers cost money – sometimes a lot of it. This reality poses a problem for many people who need to file a lawsuit. That is, do massive attorney fees justify the money you may recover in a civil lawsuit? And, what if you lose the lawsuit? You still owe the attorney legal fees. Fortunately, small claims court provides a solution to this dilemma. These courts allow plaintiffs (people suing) to file lawsuits involving relatively small sums – and represent themselves. This system lets people avoid the massive legal fees of hiring an attorney while still filing a lawsuit.
As such, we’ll use this article to explain how to take someone to small claims court. Specifically, we’ll cover the following topics:
- What is Small Claims Court?
- How to File a Suit Against Someone in Small Claims Court
- What are the Outcomes of Small Claims Court?
- What to Expect in a Small Claims Court Trial
- Final Thoughts
What is Small Claims Court?
What happens if someone owes you money, but you don’t want to hire an attorney to handle a lawsuit? If you want to collect a small sum, the expenses of a lawyer normally don’t make sense. Small claims court solves this problem.
Rather than file a civil suit in state court, small claims court provides an alternative. Each state has different procedures, but they all follow a similar structure. Plaintiffs can file relatively simple, low-dollar lawsuits, and a judge adjudicates the case directly.
Furthermore, plaintiffs and defendants (people being sued) in small claims courts represent themselves. In state court, attorneys need to follow a strict set of procedures. For this reason, if you want to file suit in state court, you likely need to hire an attorney. Small claims courts have a far more informal set of guidelines, so you don’t need formal legal training.
What to Expect When You File for Small Claims Court
Due to their simplified nature, plaintiffs can’t file all types of claims in this system. For example, divorces, name changes, and custody issues cannot be addressed here. But, if your case involves money, you can likely file suit in small claims court. More precisely, if your case involves a certain amount of money, you can file. Every state imposes a different ceiling, but average maximum amounts range between $3,000 to $15,000.
Depending on your state, you’ll need to complete certain forms to file your claim. These forms are designed for non-attorneys to complete. But, they can still be complicated. If not comfortable, you may want to consult a professional to assist with this process. This consultation will still likely cost you far less than retaining a lawyer for a formal civil suit. After completing all paperwork, you must submit it to the small claims clerk.
Once you submit the required paperwork and pay the associated court fees, you next need to serve the defendant(s) the court papers. State laws differ on how to complete this step. But, you can get yourself in trouble if you don’t follow these laws. Instead of risking this, it often makes sense to hire a private process server to serve the defendant. This protects you legally, and these professionals will likely handle the process more efficiently than you could. And, you can include these costs in the money judgment you request in court.
After filing the small claims paperwork, the plaintiff will wait for a small claims court date. At the hearing, both the plaintiff and defendant will have opportunities to present their cases.
What are the Outcomes of Small Claims Court?
Due to these courts’ simplified nature, judges can only award money judgments. Consequently, one of two broad outcomes usually arises from small claims court. If the judge decides in the plaintiff’s favor, she will award a certain monetary judgment. However, courts cannot enforce this judgment. Rather, successful plaintiffs will need to pursue additional collection steps once armed with this judgment.
Alternatively, judges could rule in favor of the defendant. If this happens, plaintiffs still have an opportunity to appeal the judgment. But, this doesn’t mean simply refiling the case. Instead, plaintiffs must offer some new evidence or argument to successfully appeal a judgment.
How to File a Suit Against Someone in Small Claims Court
If you want to file a small claims suit against someone, you should first research your state’s rules. As discussed, every state requires different procedures. Each state also has different monetary ceilings for this venue. For instance, if you’re owed $15,000, you’ll want to confirm that your state has a small claims maximum of $15,000 or greater.
Once you’ve confirmed that the small claims court allows your suit, you need to file court paperwork. You can download these forms online. Once completed, you’ll submit these forms to the small claims clerk.
Next, you need to deliver the same court paperwork to the defendant(s). This action is known as service of process, or “serving” someone. If you fail to serve the defendant in accordance with state law, the judge will dismiss your case. Accordingly, you should consider hiring a private process server to handle this step on your behalf.
Eventually, the small claims clerk will assign you a court date. At this point, both plaintiff and defendant appear before the judge to plead their cases. After hearing arguments from both sides, the judge will decide in favor of one party or the other. Depending on the case, this decision could potentially include a monetary judgment.
What are the Outcomes of Small Claims Court?
As stated above, two outcomes normally arise from small claims courts. That is, the judge decides in favor of either the plaintiff or defendant. But, if considering this route, you should understand all possible outcomes, regardless of likelihood.
Outcome 1 – Person Being Sued Pays Fee
This is the outcome you hope for when filing a small claims suit. In this situation, the judge rules in favor of the plaintiff and issues an associated monetary judgment against the defendant. However, the court does not enforce the actual collections. Instead, the plaintiff, armed with the judgment, will need to pursue additional collection steps.
Outcome 2 – Person Suing Loses the Case
Alternatively, the judge may rule in favor of the defendant. In this case, the plaintiff will not receive any monetary judgment. However, he or she does retain the right to file an appeal. But, this appeal must present additional evidence to be considered.
Outcome 3 – Person Being Sued Does Not Respond
Occasionally, a defendant will not respond when served court papers. In these situations, the plaintiff still needs to attend the scheduled hearing. At the hearing, the plaintiff will then briefly explain the situation to the judge in order to prove a basis exists for the lawsuit. Additionally, the plaintiff will need to prove he or she did, in fact, serve the defendant. Then, the judge will normally rule in the plaintiff’s favor and issue a judgment against the defendant.
Outcome 4 – Person Being Sued Files a Counterclaim
In rare situations, a defendant may believe he or she has a case against you. Accordingly, defendants can file counterclaims to your initial suit. This differs from a defense, which is a defendant’s argument against your suit. Instead, a counterclaim argues that, in fact, you as the plaintiff owe money to the defendant.
Generally speaking, this counterclaim will pertain to the same event as the original lawsuit. And, if accepted, the judge will decide on both the original suit and counterclaim at the same time.
What to Expect in a Small Claims Court Trial
Here are a few things you should expect to deal with if you’re ever in a small claims court.
How Long Do Small Claims Trials Take?
Small claims trial timelines depend on a few major factors. First, has the plaintiff appropriately filed all paperwork with the small claims clerk? If you make mistakes, the process will take longer. Next, does the defendant plan on disputing the case? This can also extend the process. Lastly, what does the court’s schedule look like? This factor is outside of either the plaintiff’s or defendant’s control. But, if significantly backed up, you could wait for your day in court for an extended period of time.
Having outlined the above variables, most small claim trials – from start to finish – take two to three months.
Small Claims Court Possible Outcomes
If you sue someone in small claims court, the best possible outcome is the judge deciding in your favor. If so, she will issue a monetary judgment against the defendant. At that point, you’ll need to use that judgment to begin the collections process, as the court does not do this.
Alternatively, the judge could decide in favor of the defendant. When this happens, you have the opportunity to appeal the ruling. But, before doing so, you’ll need to confirm that you’re bringing some sort of new evidence to the hearing. You can’t file an appeal to simply make the same argument.
In some situations, defendants fail to show up at court. This normally results in the judge ruling in favor of the plaintiff. And, in rare cases, the defendant will file a counterclaim against the plaintiff. When this occurs, the small claims judge will decide both suits at the same hearing.
Small claims court provides a relatively inexpensive alternative to a normal civil suit. Plaintiffs represent themselves, so you avoid hefty attorney fees. However, filing a small claims lawsuit still poses plenty of obstacles. The process can be stressful and time-consuming, and the paperwork can confuse non-lawyers. Consequently, if considering this legal route, we still highly recommend consulting with professionals.
At Tax Hack, we live and breathe this sort of support. We’re standing by to assist you with all of your small business tax needs. Contact us today to set up a one-on-one strategy session with one of our tax pros.