If someone (the plaintiff) has filed a lawsuit against you in small claims court, you, as the defendant, may lose the case and a judgment can be entered against you. The judgment is the court's order for you to pay a sum of money to the plaintiff. If you're involved in small claims court case, you should have an idea about the process of paying a judgment if you lose the case.

Local Law and Procedures

While small claims courts will share common elements, there are going to be rules that apply in your state or county. A small claims court's Web site will likely have a number of resources available to you describing court rules and procedures, as well as forms you might need to use in your case. Familiarity with these resources can help you navigate your small claims court case.

Paying Your Judgment

If a judgment is entered against you, you're known as a judgment debtor, and the plaintiff to whom you owe the judgment is called the judgment creditor. Even though it's a small claims court judgment, it's important to decide which method you'll use to pay your judgment and to know when you must do so. There are consequences if you don't pay.

Depending on local rules and procedures, you may have several options for paying the judgment. These include:

  • Paying the judgment directly to the court
  • Paying the judgment creditor directly
  • Setting up an installment payment plan

Your small claims court will probably have a form to use if you're making a payment to the court directly. This form may have a title such as "Request to Pay Judgment to Court." You'll file the form, along with the amount of your payment and any other required fees to the court's clerk. The clerk will file a form showing you've paid, called a satisfaction of judgment, and will notify the judgment creditor as well.

If you pay the judgment creditor directly, make sure that you have proof of your payment, such as your cancelled check or a copy of a money order. You'll want to ask the judgment creditor to file a satisfaction of judgment with the small claims court. If he doesn't cooperate, there's a court process for proving that you paid the judgment and having a satisfaction of judgment filed in court records. Check with your small claims court for the process in your area.

It's important to follow up and make sure that a satisfaction of judgment has been filed, and that credit bureau and agency reports show the judgment as paid. Judgments are public court records, and this information is picked up by the credit reporting agencies.

Installment Payment Plans

Installment payment plans are available. The process varies, but can include asking the judge to arrange an installment payment plan when the judgment is entered, or filing forms with the court's clerk to request a payment plan. It's a good idea to check out this option if you won't be able to pay the judgment all at once and you can head off steps the judgment creditor might take to collect the judgment from you.

What Happens If You Don't Pay the Judgment?

Typically the judgment debtor can start collection actions against you once the time for filing an appeal has passed, usually 30 days after the judgment is entered. While you are in an adversarial situation, do try to cooperate with the judgment creditor in finding a way to pay the judgment because it can save both of you money and time.

Some of the methods for collecting a judgment include:

  • Garnishing your wages or bank account. There are limits on how much can be withheld from your net wages, and if your wages are below a certain limit, garnishment might not be available
  • Collecting from various types of property or property interests you own. A judgment creditor could seek to collect on a judgment through seizing personal property, including vehicles, real estate or intangible resources, such as accounts receivable or judgments owed to you
  • Seeking suspension or other action against licenses you hold, such as professional licenses or a driver's license

If the judgment debtor needs to pursue collection actions, you'll probably be responsible for collection costs and interest on the amount of the judgment. It's worthwhile to cooperate with the judgment debtor and make arrangements for paying your judgment.

Questions for Your Attorney

  • I didn't pay a small claims court judgment and the judgment debtor is now trying to have my car sold to pay the judgment, which is a costly method for collection. Do I have to pay the costs for this process, considering that less costly options were available, like garnishing my bank account?
  • Can a judgment debtor seek collection against assets I own with my spouse?
  • I filed the forms to request an installment payment plan for my small claims court judgment, but the judgment creditor probably will challenge my request out of spite. Will the small claims court approve my plan if there's no good reason to reject it?
  • What happens to a small claims court judgment if I happen to file for bankruptcy?

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