But even if you're willing to pay those costs and wait months for your case to be heard, there's still one major limiting factor to small claims court that you simply can't avoid:
Small claims courts are limited by jurisdiction.
That means that a small claims court can only try cases that happen in and around the cities and counties where they're situated. That's fine if both you and the other party reside or do business within the small claims court's boundaries. But if either one of you don't live or do business within those boundaries, you're out of luck. Especially these days, when more transactions occur over the internet, fewer of them happen right next door. They could be in the next city, county or anywhere in North America.
You can't sue parties outside your jurisdiction, because chances are the amount you're disputing is less than what a lawyer would charge you to pursue the matter. And even if you turned the matter over to a collection agency, chances are that they only pay you 60% of whatever amount they manage to collect.
Since you can't sue in small claims court, the next best tool to use is probably an online settlement service. The reasons are simple:
- Most people really do want to settle disputes. Just like you, they don't need the stress, aggravation and hassles hanging over them. They want this thing out of their lives as much as you do.
- Most people want to stay in business and keep their credit ratings solid. Especially in a recessionary economy, when many people are coming out of bankruptcy, nobody wants to destroy a credit score they've worked hard to rebuild. A judgement from a small claims court or a collection agency shows up on their credit history, even if it's paid in full.
- If it's a business dispute, people know that one bad Yelp review can kill their reputations. That motivates them to keep customers and associates happy, especially on the internet, where anyone, anywhere can read about it.
- With an online settlement service, neither of you has to show up in small claims court. Our research has shown that among the top three reasons why people hate going to court is staring down the other guy. They'll do anything to avoid it. But they will respond to an online third party who's acting in their best interest.
- Unlike small claims court, an online settlement service will allow them to pay their negotiated settlement amount on a credit card, which allows him to pay off his settlement monthly. Small claims court makes paying a judgement nearly impossible, requiring them to pay the whole amount by cashier's check.
- An online settlement service allows them to handle the matter in a convenient way, any time of day or night. Like you, they have things to do, businesses to run. They'd rather deal with these kinds of things when they're not busy or rushed.
- Unlike small claims court or collection agencies, an online settlement service approaches them in a non-threatening way. It offers them an opportunity to get a discount, to make their own offer and bargain a little bit without facing any hostility.