What You Should Know About Going to Small Claims Court
If you are having an issue with a customer or client not paying their bill or going against a contract they signed, you might be considering small claims court. However, the process can be rather extensive and expensive, so you might want to think otherwise. Here are some things to know about going to small claims court and how it can be avoided.
What is small claims court?
Small claims court gets its name from the fact that it only handles cases of a smaller amount. If you are disputing something that is only a few thousand dollars, it is probably low enough of a dispute for small claims court. The hearing during this type of court is more informal and the process goes more quickly. The rules also tend to be more relaxed than court cases with larger disputes. It is also not uncommon for these matters to be settled without actually standing in front of a judge.
What are some tips if you head to court?
If you are going to small claims court, make sure you are fully prepared ahead of time. This is not something you can give just a fraction of the effort, assuming the hearing will go your way. Make sure you have an excellent lawyer from the very beginning of the process. Choose one that has handled similar cases before and has had a business owner as the client, instead of just the consumer. Start gathering documentation that proves your claim, such as invoices, contracts that were signed, and copies of any statements you sent to request payment from the customer or client. Show a timeline of events that showed you made every attempt to collect payment if that is what you are suing for.
How can you avoid small claims court?
If you want to avoid a hearing in small claims court, you can try negotiating out of court. Have your lawyer contact the customer or client and set up a time to meet. It is possible that the defendant will also want to stay out of court and may not be able to pay the full balance now, but will send a smaller payment, or you agree to a regular, smaller payment until it is paid in full. If this doesn't work and you think you are headed to court, ask for mediation first. This is another great way to negotiate without having to go to a hearing.