Every business should use AI-powered analytics to keep track of its data and help them turn the most complex findings into easy-to-understand snippets. For instance, it can help you keep track of your business financial aspects, such as claims analytics, allowing you to pinpoint issues quickly. If you see problems in your finances, depending on your business, it may be due to your lessee not paying rent or a client not paying for the services you’ve offered.
If you’ve run through the collections process and still not receive any payment, filing for a small claim is ideal.
But you may wonder, what are small claims? These are civil cases exclusive for the compensation or repayment of a specific sum of money. It gives you access to legally collect money from someone who owes you without spending large sums of money on legal fees. Hearings revolving small claims suits usually occur at an exclusive court called “small claims courts.” It allows small business owners or the average citizen to settle disputes quickly, efficiently, and inexpensively.
There are several types of small claims, with the most common, including:
- Property damage
- Breach of contracts
- Defective products
- Personal injuries
If you’re currently experiencing any of these problems and having difficulty collecting payments, filing for a small claims case is the best choice.
How to File for Small Claims
Before filing for small claims, keep in mind that taking a case to small claims court doesn’t ensure you’ll get your money back. You can only file for these suits if the debt a person owes you or your business is below a specific amount. Different states have varying limits to their small claims, so ensure you know your state’s local small claims court maximum before taking the debtor to court.
However, if you’re sure that you want to take the debtor to your local small claims court, here’s how you can file for it.
- File in the Paperwork — Visit your state’s or county’s clerk’s office and tell them you would like to file a small claim against a debtor. They will provide you with paperwork that requires you to fill out your name (plaintiff), the debtor’s name (defendant), and the amount they owe you.
- Service of Process — After filing your case, you need to notify the debtor that they’re getting sued, this is termed as “service of process.” There are regulations on who can serve defendants, including private process servers, personal services, or certified mails. After this, the court will schedule a date for the case hearing in small claims court.
- Going to Court — For pre-trial hearing, you and the debtor can bring only documents to prove the cases. You both have the option to choose to have the case hearing facilitated by a mediator instead of proceeding to trial. When you decide to go to court, you can speak before a judge or other similar officials alongside witnesses.
- Final and Collecting Judgment — The judge decides on final judgment for both parties after the plaintiff proves they’re entitled to the money requested. Defendants can appeal the decision if they deem necessary. The hearing will end with the court stating how much the losing party has to pay.
Although going to small claims court can encourage debtors to pay, this doesn’t mean they will necessarily pay as the court only makes the judgment and not collect the fees. So, before taking the debtor to court, it’s best to settle your disputes personally.