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Thread: small claims court and collection agencies

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    Member Needs New Keyboard Array huggytree's Avatar
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    Default small claims court and collection agencies

    im just looking for everyones experience with small claims court and collection agencies.

    how much time is spent at small claims court? how much $? do you have to go a 2nd time to actually collect the $$??

    what kind of a % do collection agencies charge? whats a typical payback?

    ive had just a couple of small collection issues over the years and my gut feeling was always right about the customer ahead of the time. So im going to follow my gut alittle better, but when it does happen again i may try a different tactic....i need to spend less time on collecting and stressing....i like the idea of passing it off to collections...hire someone else to badger the customer to pay.

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    Most collection companies won't touch anything unless you have a couple of 1000's in collections. Those that will charge fees that out weight what is due. You can get quotes on-line, however be warned you will get calls (and calls and calls and calls) selling their services.

    As for going to court, is it worth your time to spend a 1/2 day in court to collect a couple 100 dollars? If so, check you counties website. It may have a list of fees and a printed filing form.
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    Quote Originally Posted by nealrm View Post
    As for going to court, is it worth your time to spend a 1/2 day in court to collect a couple 100 dollars?
    You have a time to go to court. And there are a lot of people that take them seriously and will show up. If they have no legitimate excuse, you'll win. If they don't show up, you win by default.
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    Member Needs New Keyboard Array Steve B's Avatar
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    I've had great success with small claims court - I've won every time (about 4 or 5). I would count on about half a day. I'm fascinated by our legal system and it feels good to be a part of it, so I don't mind it at all. I actually LOVE being on jury duty too (so I'm probably a bit unusual).

    Nealrm was right about collection agencies. If you don't have enough to collect they can't make enough money.

    Collecting the money you win in small claims court varies by state. I won a case in PA a long time ago and all I had to do was pay the Sherrif his fee (which was eventually paid by the other party) and he set up a Sherrif's sale of all the other parties belongings. That was enough to get him to cough up the check. In KY I have a guy that didn't pay me what I won in court - but it will haunt him on his credit forever.

    The cost of the court fee is moot since you get the loser to pay that when you win.
    Steve B

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    Member Needs New Keyboard Array huggytree's Avatar
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    thanks for the advice...ill completely forget about the collection agency idea.

    when im having a slow month i dont mind 1/2 a day...when i busy i definately would..

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    Quote Originally Posted by Steve B View Post
    I've had great success with small claims court - I've won every time (about 4 or 5). I would count on about half a day.
    I'd say about a half day is a reasonable amount of time to expect to spend in court, but remember to add the time it takes you to fill out the small claims complaint and file it. If you are in a small town a few minutes away from the local court house, travel time may not be a factor but in many cases, just getting to and from the court house takes a fair amount of time.

    Nealrm was right about collection agencies. If you don't have enough to collect they can't make enough money.
    I agree. Collection agencies need either a large amount at issue or a very steady stream of identical cases to make it worth their while. They will take a $100 past due balance from a utility or credit card company because they get thousands of cases and just need to put the basic information into their database - their system automatically does the rest. Many will not even take on individual claims from small businesses.

    Collecting the money you win in small claims court varies by state. I won a case in PA a long time ago and all I had to do was pay the Sherrif his fee (which was eventually paid by the other party) and he set up a Sherrif's sale of all the other parties belongings. That was enough to get him to cough up the check. In KY I have a guy that didn't pay me what I won in court - but it will haunt him on his credit forever.
    This is something to consider. In most states, getting the judgment is only the first step. If a deadbeat is not worried about his credit rating, then he can ignore the judgment and wait until you take the next step. The next step is generally levying the debtor's assets and selling them in a sheriff's sale. If you don't know what assets the debtors has, there may be a middle step which goes by different names but in Illinois is called a citation to discover assets. It is basically a separate legal proceeding where you can learn what assets the debtor has by issuing subpoenas to the debtor, his bank, his employer, etc...

    Instead of (or in addition to) levying the debtor's assets, you may also be able to garnish his wages and require his employer to withhold a portion of each paycheck until your debt is repaid.

    The cost of the court fee is moot since you get the loser to pay that when you win.
    It's moot if you win and collect. If the debtor is judgment-proof (he can't pay), then this is the classic case of throwing good money after bad.

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    Member Needs New Keyboard Array Steve B's Avatar
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    "It's moot if you win and collect."

    Good point. I'm assuming you wouldn't be taking someone to court unless you knew you were going to win. The filing fee around here is about $35 - so, even if nothing gets collected it's not significant.
    Steve B

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    have any of you ever charged the person, who you won a small court settlement against, for the gas it cost you to get there and back home; plus the amount of money you project they "took" from your company and your time away from work to arrive at court and account for monies owed?

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    Member Needs New Keyboard Array huggytree's Avatar
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    that would be a beautiful thing if you could!

    my van gets 8mpg

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    Member Needs New Keyboard Array Steve B's Avatar
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    The judge would laugh at that request.
    Steve B

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