Navigating Small Claims Court in Colorado
What do you do when somebody owes you money but not enough to justify a lawyer? The answer is small claims court. If you end up there, here are some tips to increase your chances of success.
Colorado has three levels of trial courts. They are district court, county court and small claims court. District court is the expensive court with lots of rules that must be followed. County court is the mid-level court for disputes under $15,000.00. The rules are relaxed in county court, but there are still rules that must be followed.
Small claims court is the court for claims under $7,500.00. It is also the court with the least number of rules and where lawyers are discouraged from attending. The rules are relaxed. In fact, many lawyers consider it a free-for-all. The cost of attending is cheap, expensive lawyers are scarce and just about anything goes.
There is more to succeeding in small claims court than getting the judge to award a judgment. Just because the judge orders the defendant to pay does not mean the defendant will pay. The plaintiff still has to collect on that judgment. In order to increase the chances of collecting, pay attention to the details. Three important details are:
- proper names of the defendant,
- post judgment costs of collection and
- the interest owed on the judgment.
A small claims lawsuit starts with the filing of a complaint. The person filing the complaint is called the plaintiff. The small claims court provides a form complaint and the plaintiff inserts the name of the person who owes the money – the defendant. Spend a little extra time making sure that the defendant’s name is correct and includes all forms of the defendant’s name. For example, Bob Smith may sign his name as Robert Smith. He may own real estate in the name Robert E. Smith. His family may know him as Robert E. Smith, Jr. His bank may have an account in the name Robert Edward Smith. Including all forms of the defendant’s name can make a difference. Do this by using acronyms like a/k/a (also known as), f/k/a (formerly known as) and n/k/a (now known as). For example, “Bob Smith, a/k/a Robert Smith, Robert E. Smith and Robert E. Smith, Jr.”
Try to include in the judgment that all costs of enforcing the judgment are included. Most plaintiffs are thrilled to get a judgment for the amount of the debt. There is more to the judgment than the amount of the debt. There are other costs associated with the debt. The plaintiff may be entitled to costs of filing the lawsuit and continuing costs of collection including attorney fees. Continuing costs of collection can be significant especially if the defendant is located out of state. A collection company or lawyer may be more interested in collecting the judgment if continuing costs of collection are part of the judgment.
Make sure the judgment specifically states the interest rate on the debt. Most contractual agreements include an interest rate of 18% or more. Request that the judgment specifically state the interest rate within the judgment. Otherwise, the plaintiff may not get any interest on the judgment. This can be important if several years pass before the defendant is forced to pay what is owed.
Record the judgment in the real property records of any county where the defendant owns real property. This can be a very effective way to passively collect on a judgment. Keep in mind that the lien on the real property expires in six years.
The small claims court is a division of the county court. Therefore, the small claims court judgment is good for 6 years. If collection efforts are not productive, calendar the expiration date of the judgment and perhaps check back every couple of years. As the expiration date of the judgment approaches, research whether the judgment can be revived for additional years. If you are diligent and patient, you may still recover what is owed … and with significant interest. Good luck!
