Criteria for Choosing Not to Initiate a Small Claims Court Action
The debtor and the deal should determine if you sue.
Regardless of what your small claim is, if you are faced with the problem of collecting a debt or fee, you have alternatives. One of the most commonly chosen options is to turn over the problem to a collection agency, a tactic I employed several times without much success.
Pay no attention to the fact that they take 20% to 25% if their collection efforts are successful. According to the Nilson Report, an industry newsletter published in Oxnard, California, collection agencies retrieve a mere 7.5 cents out of every dollar they attempt to collect.
Savvy debtors are well aware that they are amply protected from certain abusive practices of collection agencies by the 1977 Fair Debt Collection Practices Act. As a consequence of the act, while an individual creditor may call a person at work or at home after 9:00 p.m. or threaten to sue, a collection agency is legally prohibited from doing the same.
My experiences with collection agencies demonstrate that they are capable of collecting the fees or debts that are generally collectible to begin with. However, the small claims court system enables people to "get the gelt" for themselves without recourse to a collection agency, which will pocket an unearned share of the money.
For the committed do-it-yourself (pro se) creditor, a review of your circumstances is a prerequisite. Inherent in any decision whether or not to commence a legal battle or flee from it are some basic considerations that must be examined. It is foolhardy to engage in a small claims litigation without examining the factors that will have some bearing on whether you will ultimately prevail.
Insofar as possible you should review the factors that may determine (1) whether you have a reasonable chance of winning a judgment in your favor and (2) whether you have a reasonable chance of collecting. Here are some considerations that may have a bearing on the outcome.
When to Avoid Small Calims Court
The considerations listed here are applicable to all potential claimants. I believe that many claimants should and will avoid pursuing the small claims court approach simply because their personality type renders them highly uncomfortable in situations that may involve direct confrontation. It is for that same reason that the service provider is often loath to actually call the debtor himself to request payment, an elementary approach that is often effective. In fact I highly recommend such an action as a first step because what the debtor says during that call may well provide the incentives to either initiate or refrain from initiating an action.
You will probably want to avoid small claims court if:
I recall being paid with an American Express card for the service I provided. The bill was in dispute and my patient stopped payment. In this case I was eventually paid, but I had to spend much time explaining to the review board person at American Express that my charge was appropriate for the services I rendered.
CONFRONTATION: AN ENLIGHTENING STORY
In more than one instance, on the night of my court hearing, I arrived at the court and sat down to await the "calendar call." As I surveyed the scene, I realized I had unintentionally seated myself next to my patient. At first I was startled, but managed to seize the moment, and began to exchange pleasantries. In so doing, I discovered that my patient had come to court that night, not to contest, but to arrange a settlement. He had been too embarrassed to contact us by mail or telephone at the office. We continued on to the hearing where the arbitrator formally witnessed the settlement agreement and wrote the terms of our settlement into the judgment.
This event reinforced my belief that in some cases the only way to confront the nonpayment issue is in a formal environment such as that offered by the small claims court. In essence you are fully awakening the debtor to responsibility for his bill and the seriousness of your intentions to collect it.
Home | Faq's| Free Legal Forms | Contact Us | Affiliate Program | Order