When Does the Loser Have to Pay If You Win a Lawsuit in Small Claims Court?

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When you lose a small claims case, the court gives the winner the right to collect money from you. How long you have to pay this money differs between states, but in general the winner can take the money from you when he chooses. Small claims court and collections laws differ widely between states, and you should always talk to a lawyer in your area if you need advice or legal assistance with a small claims court question.

Judgments

When someone sues you in small claims court and wins, either because the person proved her case or because you failed to appear, the court issues a judgment stating how much you owe to the winner. It is then up to the person who sued you, known as the plaintiff or the judgment creditor, to collect the money you owe from you. In general, the court will not collect the money for a judgment creditor.

Collections

Once you lose a lawsuit, the judgment creditor gains specific legal rights to collect the money. The creditor can, for example, legally garnish your wages, meaning he can take money directly out of your paycheck without your permission. If you want to avoid this, pay the judgment creditor back as soon as you can. Otherwise, the creditor can take any collection actions available in your state.

Time Periods

The time you have to pay on a small claims judgment is typically up to both you and the judgment creditor. However, if the creditor fails to collect the money in a certain amount of time, you may be free from having to pay it at all. All states have statutes of limitations on judgments that limit how long the creditor has to collect the money. These laws give the creditor a limited amount of time, ranging from three to 20 years, to collect the money. After this time has passed, the creditor cannot collect on the judgment.

Settlement

Apart from going to trial and losing a small claims court case, you and the plaintiff can settle your differences before you appear in court. If you and the plaintiff can come to an agreement between yourselves, known as a settlement agreement, you can avoid having to go to court and avoid any collection processes.

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