Small Claims Court: Mistakes You Should Not Make

Posted by Paul Miller on June 15, 2017  /   Posted in Uncategorized

Maine_Small_Claims_CourtSmall Claims Court works well if you know the correct procedures, and you research your files before taking on the process. However, if you are not careful, you may wind up with a useless judgment. This week, I had the awful job of telling a prospective client that his $5,000 judgment might be uncollectible. Let us look at what happened.

Our client is a consumer who sued a business. The debt owed to him was documented and valid. So far so good, right? When his contact at the business did not pay, he hired an attorney to sue the business and the person he believed was the owner of the business. He paid his lawyer $ 1,000 upfront to take the case to court.

Six months later, his lawyer called him with the good and the bad news. The good news was that our client was awarded a judgment for $5,000. The bad news was that his attorney informed him that his services did not include collection of the judgment, and that he would have to collect the judgment on his own.

The news got worse. Our client’s contact is not, and never has been, a principal of business, and was likely not authorized to sign on behalf of the business. He has no assets in his name. The business name, as sued, is incorrect. The actual business, not named in the lawsuit, has no assets in its name.

So, what went wrong? First, our client did not do research to find information on the company and its principals. Perhaps he believed his attorney would do that, but the attorney relied on the information provided to him. Secondly, our client did not ask his attorney which services would be provided. Small Claims Court is great for getting a judgment, but collection is about actually getting paid. The Court does not collect the money for you, so anyone who accepts the case for you should be experienced in debt collection, not just filing lawsuits.

Lastly, our client took a case to his attorney that was better suited for a collection agency. A collection agency would have worked to get the debtors on a payment plan, and if they decided that legal action was necessary, would have researched the file and handed the attorney file that had the potential to get the client paid.

Small Claims Court is not for every file. An attorney is not always the best option for debt collection and not every attorney has experience needed to recover your money. Make sure you know the difference.

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