Why mediation is even worse than small claims court.

If you've ever been told that "the only way to get your money is to go to small claims court," you should know that is completely not true.  In fact, small claims court is one of the worst venues for you to settle your dispute, mainly because it's costly, it rarely works and can take months to get through the process.

And even if you win in small claims court, after months of waiting, there's no guarantee you're going to get your money. That's what they don't  tell you.

At the beginning of every small claims court session, the judge (or presiding commissioner) starts off with a lecture, advising everyone to "go out in the hallway and try to settle your dispute." If you can't settle it outside the courtroom, the judge tries to scare you when he hears the case, warning that the losing party will have the verdict applied to his credit rating even if he pays in full.

Very often, the courts suggest mediation as an alternative to trial, but be warned: many mediators are even less skilled than judges at settling disputes.  In the first place, mediators charge hefty fees for their services. Secondly, it's not in a mediator's interest to settle the matter quickly: he gets paid by the hour, so dragging out the case just makes more money for him and doesn't guarantee a good settlement for you. Finally, there's no licensing or experience required to be a mediator, which means the guy who you hire likely has no idea of what your dispute is about.

Given that small claims court (and mediation) require time off from work, there are even more costs involved. Fortunately, there are now alternatives to both mediation and small claims court.  Online settlement services allow you to file your case (usually at no cost until both parties agree to the process) and settle the case for you on terms that are much better for you. The debtor usually gets a small discount and the creditor is paid within ten business days.

Online settlement services generally produce better results because there's no mediator and no small claims court involved. You describe the matter and the other party agrees to the description. After that, the service calculates a settlement amount optimized to suit the two parties, so your chances of settling are much better.

Removing costly human mediators and small claims court judges can save you time and money. Before you file in small claims court, it's a good idea to check them out.