« Judgments are Not a Guarantee of Payment | Main | The Most Effective Way to Collect »

Jun 5
Judgments are Not a Guarantee of Payment
Small claims court can be a good tool for you to use to collect money that you feel you cannot waste anymore time, energy or money on with letters and phone calls. When you choose to use small claims court, remember that using the court system takes time.
If you are successful in obtaining a judgment, you can garnish wages or assets if the judgment is not paid.  Something you cannot do with just an unpaid invoice.

Every state is different, in NH the maximum amount you can use small claims court for is $3500.00, so if your debt is less than that amount, it may be worth your while to take this route. You pay all the filing fees up front but when you win, those fees will be awarded to you.
My experience has been that most debtors do not show up and you win a judgment by default.  Once you have obtained this judgment, you still need to try and collect on it.

If your debtor does not pay the judgment, you will need to file with the courthouse for periodic payments.  The court will notify you and the debtor by mail of the hearing, and you will both have to show up.  The debtor will have to explain to the judge why they have not paid and why they feel they cannot pay. They will have to have documentation to support their claim of not being able to pay and will have to prove their income. The judge will then decide if and how much the debtor can pay.
You will then have a court order for payments towards your debt.  If someone violates a court order, they are in contempt of court and can be arrested.

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