How To Collect Your Money in a Small Claims Case

Find out when and how to start your collection efforts

By , J.D., New York University School of Law

You won your case in small claims court. Congratulations! You undoubtedly want to collect every penny from the opposing party, pronto. If the other party is cooperative, that won't be much trouble. But some defendants have figured out that typically the court will not make them pay unless you take action. That's where this chapter comes in, explaining when you can start your collection efforts and how to enforce your judgment. With a little patience and some careful planning, you should be able to collect–by garnishing wages, attaching the defendant's bank account, or taking other legal steps.

Do Not Harass the Debtor

Businesses that regularly attempt to collect debts for another's business' consumer customers are subject to the federal Fair Debt Collection Practices Act (15 U.S.C. §1692-1692p.) and in most states, subject to similar state laws. These laws protect consumer debtors from abusive or unfair conduct. Basically, the rules prohibit conduct such as calling the debtor so often that it is harassing, causing the debtor's phone to ring continuously, using profane language, or badmouthing the debtor in the community. Some state laws apply even if you are doing your own collections. If you plan to do your own collections, you should consult with a lawyer and/or review your state law carefully. (Of course, it's fine to talk about the judgment to officials who are helping with the collection process.) Even if you are trying to collect debts not covered by these consumer protection laws, other more general laws may apply if you use abusive or unfair tactics, so it's best to avoid inappropriate conduct. Wait until the dust settles before beginning your collection efforts. This means different things in contested cases and default cases.

Collecting Your Money Judgment in Contested Cases

If the defendant appeared in court, fought the case, and lost, you may have to wait to see whether there is an appeal before you start trying to collect the judgment amount. Some states prohibit collection efforts while a defendant can still appeal. Other states do not require you to wait, but it is a good idea to wait anyway. Trying to collect may spur the defendant to appeal the judgment. Depending on your state's rules, an appeal must normally be filed within 10 to 30 days.

Exception. In a few states, no appeals are allowed, and in several more, only a losing defendant can appeal. If the other party can't appeal, you can begin collection activities immediately.

After the allowed time to appeal has passed, check with the small claims court clerk to make sure that the defendant hasn't appealed. If the defendant has appealed, then you will get notice in the mail of the appeals hearing date.

Some states don't stop you from collecting while you are waiting for the appeal to be decided. Others do. Again, even if you can collect, you may be better off waiting. A defendant is likely to take the appeal more seriously, if, for example, you are trying to take money out of his or her paycheck before the appeal hearing. On the other hand, if the law doesn't stop you from collecting before the appeal is decided, and you believe the defendant may be using the time to hide assets, you may want to act quickly to collect what you can. After the appeals court makes its decision, it will notify the small claims court. If the appeal was decided in your favor, you can proceed to enforce the judgment immediately.

Collecting Your Money Judgment in Default Judgments

If you got your judgment because the defendant defaulted (that is, didn't show up), the defendant usually can't appeal without first asking the court to set aside or vacate the default. Most defendants who didn't show up in the first place don't bother to do this. Nevertheless, in some states, you may have to wait out the time period during which the losing party is allowed to ask the court to set aside the default judgment. And even if waiting isn't required, it's always a good idea if you are in a state that allows defendants a certain number of days in which to ask the court to set aside the default judgment. The reason is simple: If you move to collect your judgment immediately, you may alert the defendant to try to set it aside.

If the defendant loses on the request to set aside the judgment, then appeals that decision, in some states, you may have to wait until the court decides that appeal before you can begin to enforce your judgment.

Start by Asking for Payment

Once the relevant waiting period is up, what should you do? There are a few possibilities. Start by asking politely for your money. This works in many cases, especially if you have sued a responsible person or business. If you don't have personal contact with the party who owes you money, try a note like the sample below.

Sample Request For Payment

P.O. Box 66
Bangor, Maine
February 15, 20xx

Mildred Edwards
11 Milvia Street
Bangor, Maine

Re: Toller vs. Edwards (Small Claims Case No. 200600)

Dear Mrs. Edwards:

As you know, a judgment was entered against you in small claims court on January 15 in the amount of $1,457.86. As the judgment creditor, I would appreciate your paying this amount within ten days.

Thank you for your attention to this matter.

Very truly yours,
John Toller
John Toller

Payment Through the Court

Your judgment debtor may be willing to pay up–but may not want to deal directly with you. In some states, the judgment debtor can pay the judgment to the court instead. Contact your small claims court clerk to find out whether this is an option in your state. If so, it might make sense to write a short note explaining that payment can be made to the court. The court may charge the debtor for this service. Once the court receives payment, it will notify you. If you fail to claim the payment within a certain amount of time, the state will probably get to keep the money–which is an important reason to keep your current address on file with the court.

Collecting the Money

If you receive no payment after sending a polite note, you will have to get serious about collecting your money–or forget it. The emphasis in the previous sentence should be on the word "you." To many people's surprise, the court will not enforce your judgment and collect the money for you–you have to do it yourself.

Fortunately, a few of the ways to legally collect money from a debtor are relatively easy–if the debtor has any money in the first place. Hopefully, you gave some thought to collection before you brought your case. If you only now realize that your opponent doesn't have the money to buy a toothbrush, let alone pay off your judgment, you are better off not wasting more time and money trying to get your money, at least for the present. In some situations, you may want to sit on your judgment with the hope that your judgment debtor will show signs of economic life sometime in the future. But if the debtor owns real estate, you'll want to immediately put a lien on the property so that money from a sale will go to pay your judgment, even if the only property the person currently owns is a residence that is exempt from being sold.

Collection Rules Are Getting Tighter

A few states are putting teeth into their collection rules. In some states, if a judgment debtor who is solvent doesn't pay three or more small claims court judgments which were based on a repeated course of conduct or the debtor's business transactions, a judgment creditor can get triple the judgment as damages, plus attorney fees. Contact the small claims court clerk to see about any collection rules in your jurisdiction.

When the Debtor Pays by Check

Always make copies of any checks the debtor sends you as partial payment on your judgment. If the debtor fails to pay the entire judgment, you'll need to find a collection source for the unpaid portion–and the debtor's bank account is a great place to start. (See "How to Levy on Wages or Bank Accounts," below.) Your copy of the check will show the debtor's bank, branch, and account number.

If the debtor's check bounces, you may, depending on your state's law, be entitled to:

  • Sue in small claims court for the original amount of the bounced check plus damages. First, you must follow your state's detailed procedures, usually including sending a demand letter to the debtor (often by certified mail).
  • See whether your county's district attorney's office has a check diversion program. To avoid prosecution, the person who wrote a bad check must make the check good and comply with other rules. You cannot seek damages if you enlist the district attorney's help–but you'll be spared the hassle of another lawsuit.

Collecting On an Installment Judgment

When a court orders a judgment to be paid in installments and the judgment debtor misses one or more payments, the person holding the judgment (the judgment creditor) has the right to collect the missed payments immediately. But here is the problem: The judgment creditor can't collect the rest of the judgment (the part that hasn't come due yet) unless the court first sets aside the installment payment provisions and makes the entire judgment due and payable.

EXAMPLE: Phoebe gets a judgment against Ted for $3,000. The judge grants Ted's request to pay the judgment in installments of $300 per month. Ted misses the first payment, and Phoebe hears he plans to move out of state. She can immediately move to collect the $300. But to collect the rest, Phoebe must either wait until each subsequent payment is missed (and then try to collect each one) or go back to court and ask the judge to set aside the installment payments portion of the judgment so that she can collect it all.

To set aside an installment judgment, call the small claims clerk's office and find out whether the court has a form for this purpose. Below is a sample form you can copy if your court doesn't have its own form. File the original form with the small claims clerk, have a copy served on the debtor, and follow up with a Proof of Service form.

Collecting Against Government Agencies

If you have a small claims judgment against a government agency, typically you can't use any of the enforcement procedures available for other situations. Instead, you'll need to follow special procedures to collect. Public entities include your state government, counties, cities, school districts, public authorities, and any other political subdivisions in the state.

Procedures differ slightly from state to state. As soon as you are awarded a judgment against a government agency, you can contact the agency to get information about its payment procedures. In many states, you must take the following steps to collect a judgment from a government agency:

1. Prepare a written declaration under penalty of perjury stating the following:

  • the fact that you have a judgment in your favor
  • the name of the government agency that owes the judgment
  • that you desire payment, and
  • the amount of the judgment.

The sample declaration below contains all this information.

2. Get a certified copy of the judgment from the small claims court clerk.

3. Contact the agency that owes you money and find out the fee to collect the judgment.

4. Take or send the declaration, copy of the judgment, and the fee to the office or individual the agency you have the judgment against identifies as the correct place to send the documents.

5. You may be required to deliver a notice to the judgment debtor (the same government agency) where you filed a request for payment, even though doing so is redundant. To play it safe, have a friend mail photocopies of the declaration, the judgment, and a completed proof of service form to the government agency.

As with any judgment, it may be better to wait until the time to appeal has passed before asking for payment.

6. Keep the original proof of service and your copies of the declaration and judgment in a safe place.

The government agency will notify its treasurer or controller, who will pay you or deposit the money with the court. Make sure that you have your current address on file with the court–otherwise, you may never get paid.

Sample Declaration

I, Steven Nakamura, declare as follows:

1. I have a judgment against the City of Los Angeles (Los Angeles Small Claims Court case #11212).

2. I desire payment according to the terms of the judgment.

3. The exact amount required to satisfy the judgment is $2,312, plus interest at the rate allowable by law from February 16, 20xx, until the judgment is paid in full.

I declare under penalty of perjury under the laws of the State of California that this declaration is true and correct.

Dated: February 16, 20xx ______________________

Steven Nakamura