By Laura J. Lowenstein, Esq.                                 

In the world of debt collection, accounts come in all shapes and sizes.  In reality, debt accounts that are handled by attorneys are essentially litigations predominantly premised on breach of contract and/or services or goods rendered without compensation.  Speaking as an agency owner and attorney, I believe the most under-utilized yet effective tool to collect on smaller value accounts is the small claims court forum.

While the general threshold for New York small claims cases is $5,000, you can also bring cases of that value in the District or Civil Courts.  So why choose small claims?

  1. Significantly less filing fees. For example, in Nassau County, New York, a District Court action would require a $45 index fee plus process server charges that can range from approximately $25 – $75 per defendant.  Compare this to a small claims case in Nassau County that costs $15 for a claim under $1,000 and $20 for a claim over $1,000.


  1. No discovery. In small claims cases, your case and evidence is typically all presented and heard on your assigned court date.  With no discovery, comes quicker resolution.


  1. No lawyers needed. The cost-savings on this front speaks for itself.


  1. Procedurally easy and geared for pro se Typically speaking, the entire complaint is a single fillable page that states the basis for the claim, the amount of money the plaintiff seeks to recover and the name(s) and address(es) of the defendant(s).  After one’s complaint is filed with payment, a court date is scheduled (usually within 30-90 days).  A defendant may file a counterclaim within a certain amount of time pre-trial with all issues being heard on the same day.


  1. Witnesses can be compelled to appear by service of a subpoena and/or voluntarily on the trial date.


  1. Simple trial. On your court date, the parties appear and exchange documents.  Often, settlement discussions in the presence of a mediator is required if both parties are present.  If no settlement results, the presiding judge will hold your trial, which typically last no longer than 15-20 minutes.


  1. Economies of scale. In most Counties, up to 5 small claims actions can be heard on the same day.  Thus, a plaintiff can bring multiple actions for the same trial date.  The ability to limit your time in Court and address multiple claims at once is a real benefit to the small claims forum.


  1. Judgment expediency. In my experience with most New York small claims courts, judgments are issued within 30 days of one’s trial date.  The ease and speed of judgment issuance has a real-world impact besides convenience.  It allows your judgment to get an enforcement and lien jump start on any other actions that may be pending against the same defendant-debtor.  First in line will often mean first to collect.


Whether a creditor brings a small claims action – as with any action – and a judgment is obtained, said creditor can often find themselves with a judgment, but no money, in hand.  In fact, the overwhelming number of judgments granted go unenforced.  Thus, as is the practice with CRM, it is imperative that if you choose the small claims route you have a collection agency that can assist you after-the-fact with transcription, docketing and enforcement of your judgment.


For more information on Capital Resource Management, Inc. and how we help individuals and businesses generate revenue through better financial practices and compliant collections, including small claims cases and judgment enforcement, please contact us at 1-844-277-3277.

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