DIY – File Small Claims for Debt Collection

Do-It-Yourself: Collecting Debts under $10,000 by Filing Small Claims

If your claim amount is less than $10,000 you as a business owner, freelancer, or contract worker may want to bring a small claims court case against the individual or company that owes you the money. In California, you can sue in small claims court for up to $10,000 in 2012 – up from the old cap of $7,500. If the money owed you is $11,400.00, for example, you may decide to “write off” the $1,400 that is greater than the $10,000 maximum. This isn’t to say that the judge cannot know that your are “taking a hit” and that knowledge may even help build credibility for your claim and possible make for quick and clean judgment in your favor.

Small Claims Court Rules

NOTE: Be advised. If you are an individual who owns a business (i.e. sole proprietor) and are doing business under a fictitious business name, you are considered to be an ‘individual’ in Small Claims Court and your case may go to the full $10,000 limit. However, if your business is a corporation, partnership or anything other than a sole proprietorship, your maximum claim amount is cut in half to $5,000.

Small Claims Court Locations

You can obtain information about how to handle a small claims case from the Civil Courts in your County. To find the small claims court in Southern California where you can file, visit: Small Claims Court Locations in Southern California

“The Good” and “The Bad” of Small Claims Lawsuits

The Good – The good news is that the small claims courts are designed to be far simpler and much less formal than the regular court system. If your case is strong you have every opportunity to prevail.

The Bad – The potential bad news is that even if you are successful and prevail over the person or company that owes you money, getting that judgment is only 1/2 the battle – you still have to enforce the judgment you won. Typically you have the County Sheriff at your service to attach any assets you may have uncovered, but you must provide them crystal-clear, legal instructions for them to have a chance at being effective.

This is where the 1099 Contract worker or Freelancer representing himself or herself “pro se” (i.e. as his or her own lawyer) is at a distinct disadvantage compared to someone represented by an experienced attorney. The first indication of the difficulty you are facing is the very fact that you had to go to court in the first place! A judgment debtor has already clearly demonstrated a fair degree of arrogance, stubbornness, and defiance by allowing a judgment to be taken against himself or herself rather than simply pay the debt or offer to negotiate a reduced settlement, or payment arrangement. Successful judgment enforcement requires a thorough understanding of the laws and techniques utilized in enforcing judgments and is considered a specialized area of law in which many general practice lawyers are not well-trained.

California Department of Consumer Affairs

If You’re the Plaintiff … Filing Your Lawsuit Information & Help

California Judicial Branch – “The Judicial Branch of California

Self-Help Information for the Plaintiff contemplating suing Someone: California Courts

List of Small Claims Courts in Southern California

Visit our comprehensive list of Small Claims Courthouses in Southern California including:

Do You Need Help Collecting and Enforcing a Judgment?

If you are visiting our website because you are one of those frustrated Freelancers, 1099 Workers, or business owner who won a judgment but cannot collect, give us a call. Better to get some professional help to enforce and collect your judgment now than allow more critical time to pass or the judgement to expire.

If you have prevailed in superior court or in small claims and have a judgment, you are considered a “judgment creditor.” Judgment creditors usually do not have the experience or tools necessary to locate the judgment debtor’s assets. As an attorney-based, Commercial Collection Firm, we might be able to take on the enforcement of judgments on a contingency basis if the amount meets our minimums. The cost of doing business is such that for smaller judgments, including most small claims judgments, we will perform a preliminary investigation to see what the chances of judgment enforcement are. We require a $475.00 fee to pay for the preliminary investigation. When we complete the investigation, we will make a determination and then share with you whether collection is likely.

If we have determined that collection of your debt is likely, we will enter into a contingency arrangement with you where where we pick up all other costs involved in collection and charge you a reasonable 33% to 45% fee for any moneys actually collected. If, on the other hand, our investigation determines that judgment enforcement will be very difficult, we offer our clients collection services on an hourly basis. In such cases we report to our client any difficulties that we are encountering or opportunities we uncover as we move forward and it is then up to the client whether he or she wishes to pursue continued judgment enforcement and collection efforts.

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