Why So Many Businesses Won’t Go to Small Claims Court

jhon yudh@

Why So Many Businesses Won’t Go to Small Claims Court

As an independent contractor, I have had my fair share of clients who skipped out on their bills. I have been asked multiple times why I haven’t taken those clients to small claims court. The answer is pretty simple: going to court isn’t worth the stress or expense. But wait. Can’t I pass my legal expenses on to the deadbeat client?

In a perfect world, small business owners like me could find the necessary relief from bad debts in civil court. But this world is far from perfect. Unfortunately, the court system favors debtors. I know from personal experience.

An Attorney With No Intent to Pay

More than a decade ago, I did some work for a prominent local attorney who worked for the DA’s office. This guy was well known. He was also doing very well financially. I assumed he was a minimum risk client due to his circumstances. It turned out I was wrong. When it came time to pay the bill, he stiffed me.

I went through my usual procedures including sending duplicate invoices and making phone calls. After 90 days or so, it dawned on me that this guy had no intention of paying his bill. Then came the questions – “why don’t you take him to small claims court?”

Winning Doesn’t Mean Much

I could have taken my client to court and probably won the case. But winning doesn’t mean much when you have a deadbeat unwilling to pay and with the means to avoid doing so. Needless to say, an attorney working in the DA’s office has the resources to keep a contractor at bay. And in this case, he also had the willingness.

If you are looking for an explanation, Salt Lake City’s Judgment Collectors offers a simple one. According to their experts, collecting a civil judgment is up to the winning party. As the plaintiff in my case, I would have become a judgment creditor upon winning. Enforcement would have been left entirely to me.

Through my attorney, I could have requested post-judgment interrogatories. My former client, now the judgment debtor, could have used his knowledge and experience to stall my efforts. He could use the courts with which he was so familiar to keep me at arm’s length.

He Definitely Had Assets

My attorney could certainly have discovered assets to be leveraged in my favor. And if not, a judgment collection agency could have done the job. No doubt my former client had valuable assets worth knowing about. But guess what? He also had the means and opportunity to hide those assets from snooping eyes.

Time and enough research would have eventually uncovered the assets anyway. But how much money would I have spent to get to that point? And after finding the assets, how many additional legal hoops would I have had to jump through to file liens or seek Writs of Seizure and Sale?

The Means to Wear Me Out

In the end, it boils down to this: my former client had the means to simply wear me out. His experience and connections would have made it possible for him to avoid paying indefinitely. He could have dragged the fight on all the way up to the statute of limitations, forcing me to renew the judgment just to keep the fight going.

For the amount of money that he owed me, it wasn’t worth the aggravation and stress. Unfortunately, my story isn’t all that uncommon. Our system favors debtors to the extent that far too many creditors just don’t have the desire or will to fight.

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Enterprise Providers Montana Secretary Of State Christi Jacobsen

Entrepreneurship is the creation or extraction of worth. Except for small claims court circumstances, any and all Disputes might be resolved by arbitration administered by the American Arbitration Association (“AAA”). In case you are using the Providers on behalf of an organization, enterprise or different entity, you characterize that you […]
Enterprise Providers Montana Secretary Of State Christi Jacobsen
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