Small claims court offers individuals and small businesses a straightforward way to collect on owed debts or other small instances that are financially affecting them. From bad checks to unpaid bills, there are a variety of situations that can escalate to small claims court. Presenting evidence allows you to prove your case.
After taking someone to small claims court, what happens next?
Winning in small claims court doesn’t mean that the money will automatically be deposited into your bank account. While some court systems have repayment meetings to plan out the collection process, others send the winning party away with a written judgment they must collect on. Today, learn more about what to do after you win and want to collect what is owed to you.
Why Collecting Can Be Hard
According to financial experts, the percentage of Americans in debt is around 80% and many of them don’t have a plan to get out of debt. Many people are not in a financial position to pay a judgment. They may not have the assets or funds needed, so they will simply not pay anything to you.
At other times, defendants might simply not want to pay. Clients refusing to pay a contractor, for example, may be doing so out of spite. While the judgment is a piece of people that says they owe you money, the paper isn’t going to compel everyone to pay up immediately.
Instead, you often need to take specific steps to pursue enforcement so that you can get paid what the court says you are owed. These are the steps that we suggest trying when attempting to collect.
Step 1: Wait For Potential Appeals
If you were the party that sued another individual or organization and won the case, you would need to wait a certain period of time for potential appeals. Most states and courts have a specific period when appeals will be accepted. Until that period has passed or you win any appeals, it is in your best interest to wait for payment and not pursue collection.
Step 2: Ask for Payment
Once the appeals process is over, it’s time to ask for payment. Request that the defendant turns over what the judge ordered and give them some time to do so. You can communicate with their legal team or with the individual directly, but make sure that you keep track of all conversations to prevent any miscommunication.
Step 3: Attend Any Necessary Hearings
Some states require payment hearings to occur after some small claims cases. The judge will let both parties know if these hearings will be required, and the court system will organize the timing.
Ideally, the debtor will pay anything owed before the payment hearing so that it will not be necessary. If the collection hasn’t happened when the hearing occurs, the judge will take time to decide whether or not the debtor can pay and what should be done moving forward.
Before a payment hearing, gather any evidence you have that the debtor has the ability to pay. This may be necessary to ensure that you are adequately paid what is owed. With the right information, you’ll be able to help ensure that a specific payment plan is organized so that you can collect.
Should the debtor be unable to pay at this time, request that the judge set up a new payment hearing for a later date. Most states allow judgments to be enforced for up to two decades, so there is no reason that the matter should be dropped forever.
Step 4: Get a Writ of Execution or Judgment Writ
If the payment hearing has been completed or is not happening for your case, it’s time to work on getting a writ of execution or a judicial writ. These documents are issued by the court to enable you to seize specific valuable property to collect on a debt owed to you. For example, a writ of execution might be used to seize a motor vehicle that is equal or near-equal in value to what you are owed.
Step 5: Wage and Asset Collection
Once you have a writ, you can work with the local sheriff to collect it. You should never attempt to execute a writ alone, and it is always better to work with court employees or law enforcement.
It might also be possible to use the writ to garnish an individual’s wages, though whether or not this is possible will depend on the rules in your state. Many states require that a judge specifically approve this. If approved, you can work with the individual’s employer to set up the garnishing process and move forward with the collection.
Remember: You Can’t Always Collect
There are cases when collection simply won’t be possible, or it will take far longer than it is worth. It is essential to keep this in mind before pursuing a small claims case, as some people will never be able to pay what they owe. If you’re thinking about suing someone in poor financial health, consider this during the decision-making process.