Small Claims Court

Small claims court summary: 

• If you have unpaid credit card debts or other overdue debts, creditors and debt collectors could take you to small claims court. 

• Small claims court is where smaller lawsuits—suits with damages capped between $5,000 and $25,000 depending on the jurisidiction—may be filed.

• If a creditor files a lawsuit against you in small claims court, you still have the legal right to defend yourself in court—or to seek a settlement agreement outside of court.

Small Claims Court Definition and Meaning

Small claims court is a special kind of civil court where people can be sued for small amounts of money. The cap on how much can be recovered in small claims court ranges from $2,500 up to $25,000 across the U.S.; the exact limit depends on the local or state laws and who is filing the suit.

For example, In California, small claims court lawsuits are limited to $12,500 for individuals or $6,250 for lawsuits filed by a business. The small claims court for New York City is limited to lawsuit amounts of $10,000 or less, but some other cities and counties in the state of New York have limits of $5,000 or $3,000. Some states also have different limits for certain types of lawsuits that can be brought to small claims court, such as personal injury cases.

Small claims court is generally preferred for small amounts because the court process tends to work faster and the rules are simpler than in civil court. It's also often cheaper. Some credit card companies and debt collectors use small claims court to collect on unpaid debts. 

The information provided in this article is intended for general informational purposes only and shouldn't be taken as legal advice. For personalized legal advice, consult with a qualified attorney licensed to practice law in your state.

Key Features of Small Claims Court 

Small claims court has some things in common with other civil courts, but it has a few features that make it different: 

• Civil lawsuits only: Small claims court is not for criminal trials; it’s only for resolving disputes based on small amounts of money. 

• Small amounts of money: The average cap on small claims damages is around $10,000, but some states go as low as $2,500 or as high as $25,000.

• No lawyer required: You don't generally need a lawyer in small claims cases. In some states, like California, lawyers aren't even allowed in small claims court. 

• Lower costs: Bringing a lawsuit in small claims court is typically much cheaper and tends to take less time than civil court. For example, in California, the costs of filing a small claims lawsuit are only $30-$100, and the plaintiff could get a court date within one to two months.

• Collections and garnishments: Small claims court could lead to a judge ordering you to pay your creditor, just like a lawsuit in “regular” civil court. If someone wins a lawsuit against you in small claims court, they have the right to try to collect money from you and (with a judge’s permission) could garnish your bank account or collect wages from your paycheck.

• Default judgment possible: If you don't respond to a small claims court summons, there could be a default judgment, meaning the judge rules against you because you didn't show up.

Comprehensive Breakdown of Small Claims Court 

Small claims court is a “real” court, just like civil court for larger lawsuits. If you get a court summons for small claims court, don’t ignore it or overlook it. That won't make it go away and there could be serious consequences.

If you get a court summons for an unpaid debt, you might have to go to small claims court to defend yourself against your creditor’s lawsuit. Consulting a lawyer could help you understand your legal rights and defend yourself. You might even be able to get the debt collector’s lawsuit dismissed. 

Before you end up in small claims court, you might want to consider trying to settle with your creditor directly. If you haven't already been sued, a debt settlement program could help you get rid of your debt for less than you owe and avoid a lawsuit.