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How to Sue Someone Who Owes You Money

Camila Lopez - Breach of Contract - March 5, 2024

The first step is usually to send someone a demand letter. Use our free tool to write your letter.

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    Are you looking to sue someone who owes you money?

    For example, did you lend someone money, did someone breach a contract they had with you, or did someone damage your property? In this article, we cover how to take someone to small claims court for money owed and other options for resolving your dispute.

    Did you know we have a free tool powered by AI that helps you create a demand letter to someone who owes you money? This is usually the first step you take before suing someone. Check out our demand letter tool.

    Common Types of Small Claims Lawsuits Against Someone Who Owes You Money

    Really often we get the question, can I sue someone for not paying me back in small claims? 

    Yes, if you lent someone money and they never paid you back you can sue for the money they owe you. Additionally, you do not need a contract to sue someone for money owed, however, if there is a contract or some type of written agreement or evidence of an agreement this will be useful in court. 

    Below are some examples of small claims lawsuits against someone who owes you money:  

    • If you lent a friend money, you can sue them in small claims court if they failed to pay you back. However, distinguish money you lent to a friend as a gift versus a loan. You are able to sue your friend if there was a clear expectation you lent them money as a loan that had to be paid back within a certain time frame and that time for repayment has passed. 

    • If your landlord didn't return your security deposit, you can sue them in small claims. 

    • If you are owed money because someone hit your car and you had to repair it, you can sue them in small claims court.

    • If a contractor owes you money because you had to hire someone to fix the bad job they did, you can them in small claims court.

    • If an auto repair shop owes you money, you can sue them in small claims court.

    What To Do Before Suing Someone Who Owes You Money in Small Claims Court 

    Reach Out to the Person Who Owes You Money

    The first thing to do when a problem arises is to communicate with the other party. You want to make sure they understand that they owe you money and how much they owe you. Most of the time they will agree to pay you all or most of what you are owed. If they don't pay you, it might be time to escalate the situation to small claims court.

    Save All Evidence

    You want to make sure to save all evidence related to your relationship with the other person. For example, you want to make sure to save:

    • Any contracts, receipts, or invoices.

    • Written conversations you have had with the debtor (via text messages, emails, etc).

    • Any proof you have of how much money they owe you; when they were supposed to pay you; and any partial payments they have already made.

    Discuss Creative Ways to Get Paid back 

    If the debtor is someone you know personally try to sit down with them and brainstorm different ways they can pay you back. It is easier to get "buy-in" from someone when it is their idea and a brainstorming session may help generate good ideas.

    For example, maybe both you and the person that owes you money are more comfortable with small payment installments over a period of time. Discuss payment plans that work for both of you. Or maybe you have chores you’ve been putting off around your house that they can help you with. 

    Learn more about what you can do if someone owes you money. 

    Send a Demand Letter

    A demand letter is a letter that outlines a set of requests. For example, you could write to the other party to request payment of the debt and explain why it is still outstanding.

    Not only is demanding payment required in certain small claims courts, like in California small claims, but by sending a demand letter you may be able to settle your case without having to pay the legal costs of filing a small claims lawsuit!

    Unsure of what to include in your demand letter? Here are a few suggestions:

    • How much money you are owed.

    • Why you are owed money.

    • Your contact information.

    • Where to send payment.

    • Option to pay using a payment plan.

    • Option to mediate.

    • Give them a few days to respond (usually about 14 days).

    • Let them know that if they don't respond, you intend to sue.

    Did you know we have a free tool powered by AI that helps you create a demand letter to someone who owes you money? Check out our demand letter tool.

    Learn how to write a demand letter if someone owes you money

    If you are a business owner that is trying to collect outstanding payments from clients, our article on how to write a demand letter for payment may be useful. 

    What is the Maximum Amount of Money Can You Sue For in Small Claims Court? 

    The maximum amount you can sue for in small claims court is called the small claims limit. This limit will vary by state, or even by county or city. We created a 50-state chart of the small claims limit in all 50 states plus Washington D.C. 

    Note, most small claims limits fall around $10,000.For example, in New York City small claims court you may sue an individual for up to $10,000. 

    Waiving the Amount You Are Owed 

    If you are owed more than the small claims limit, you can still sue in small claims, but you have to waive any additional amount you are owed. For example, you are owed $11,000 for a loan you gave to your co-worker. You would like to sue in small claims but the limit is $10,000. You agree to sue for only the $10,000.

    How to Sue for More Than the Small Claims Limit 

    If you do not want to waive the amount you are owed to sue in small claims court you may have another option available to you. Some states have a court that comes after small claims. For example, in California, in small claims court, you can sue for up to $12,500 ($6,250 if you are suing on behalf of a corporation or LLC), however, if you want to sue for more than $12,500 you can file a limited civil.

    Note that suing in regular court, or these limited civil courts, tend to be more expensive, time-consuming, and complicated than in small claims courts. Small claims courts were designed to be user-friendly and have simplified evidence procedures which allow you to file and represent yourself without needing to hire an attorney. 

    What If the Person I am Suing Doesn’t Have Money?

    You are still able to sue someone even if they do not have any money. The fact that the person you are suing has no money does not mean you cannot sue them in small claims court. However, this issue is important to consider when figuring out how to collect a judgment (your court-ordered award) if you win a small claims case against someone with no money. 

    Here are some of the most common ways to collect a judgment against someone with no money: 

    • Garnish the person’s wages if they have a job. This means each time the person receives their salary, a percentage of that salary will be sent to you to pay off the judgment. This option is not always available, there are certain exceptions to wage garnishments like if the person is low-income.  

    • Placing a levy on a person’s property. This means you will be paid through the sale of the person’s personal property, which can include real estate, furniture, vehicles, etc.  

    • Repayment plans. You and the other person can agree to a long-term repayment plan if they have no money to satisfy the judgment. 

    How to Calculate How Much to Sue For in Small Claims Court 

    It might seem easy to know how much to sue for in small claims but it is actually harder than it seems. This is because, at the hearing, you will need to explain to the judge how you calculated the money you are owed. Ultimately, the judge will decide how much you are owed after hearing arguments from both you and the other party.This may be less than what you asked for if it is what the judge found to be fair.  

    Here are some ways you can calculate how much money you are owed:

    • Use receipts or invoices. This is the easiest way to calculate how much money someone owes you. For example, if you are a small business owner and a client owes you money for services rendered, check the invoice you provided the client. 

    • Make an estimate. When in doubt, estimate how much you are owed. For example, if you lent a roommate $1,000 to help them fix their car but also lent them additional gas money, bus fare, etc. while their car got fixed check your bank account statements to get a rough estimate of how much you actually lent your roommate.  

    How Much Does it Cost to Sue Someone Who Owes You Money in Small Claims Court?

    Filing fees vary by state and sometimes even by court or by how much you are filing for. In general, small claims court filing fees tend to be accessible and range between $10-$75

    Once the lawsuit is filed, the person you sued has to be notified that a lawsuit has been filed against them. This process is called “serving”. Depending on where you file your small claims lawsuits, there are different methods for serving a lawsuit at varying prices. Not all courts accept all methods of serving so you will have to confirm what options are available to you. 

    Below are some common serving methods: 

    • Serving using a friend or family member. You may be able to have a friend or family serve the lawsuit for you (as long as they are not involved in the lawsuit). Generally, this option is free.

    • You can hire a professional process server to serve the lawsuit. A process server is someone licensed to serve lawsuits and they charge anywhere between $50 - $125.

    • You may also be able to use a sheriff. A sheriff may be able to serve your lawsuit depending on the county where the other party is located, this fee varies but is usually around $40 - $100.

    Some small claims courts provide fee waivers for those who cannot afford to pay the filing fees or serving costs. For example, in California, if you receive public benefits like Medi-cal, Food Stamps, or SSI, you pay $0 in court fees and serving costs. Check with your local small claims court to see if they provide fee waivers and if you are eligible. 

    What is the Small Claims Statute of Limitations? 

    The deadline that determines how long you have to sue someone for money owed in small claims court is called the statute of limitations. Statutes of limitations vary by state and by type of claim. In general, many statutes of limitations range between 2-6 years and are the same for a small claims lawsuit as for other types of lawsuits. 

    Learn more about the statute of limitations. 

    Starting the Small Claims Court Lawsuit Against the Debtor

    Generally, there are three steps to starting a small claims lawsuit: 

    1. Prepare the small claims lawsuit. 

    2. File the small claims lawsuit. 

    3. Serve the small claims lawsuit. 

    Below we will break down each of the steps. 

    Step 1: Prepare the Small Claims Lawsuit 

    You will need to prepare the required forms for your small claims lawsuit. To actually fill out the small claims forms you will need to determine (1) who needs to sue (the “plaintiffs”) and (2) who needs to be sued (the “defendants”). 

    When thinking about who needs to sue: 

    • Ask yourself, who is owed money? Anyone who is owed money should be included in the lawsuit.

    • ‍ When in doubt, it is better to include everyone who potentially is owed money and let the judge decide at the hearing. If a judge doesn't think someone should be included in the lawsuit, they will take that person off the lawsuit at the hearing and leave everyone else as part of the lawsuit. 

    • If you fail to include someone who the judge determines is owed money, the judge may have you refile the lawsuit.

    When thinking about who needs to be sued:

    • If you are owed money because of a personal loan you provided, and the debtor included a cosigner, you also want to include the co-signer as a defendant.

    • If you are owed your security deposit, you want to make sure you sue the correct legal entity or the individual listed as the landlord on your lease.

    • If you are owed money because someone hit your car, you want to make sure to sue the registered owner of the vehicle, if it was not the person who hit your car. 

    Step 2: File the Small Claims Lawsuit 

    After you have prepared all the required forms, you are ready to submit the small claims lawsuit to the court. Depending on your local small claims court, there are different ways to file your lawsuit with the court: 

    • In-person. You can file your lawsuit in person by going to the small claims courthouse. 

    • By mail. You may be able to send in your small claims lawsuit and other required documents by mail. 

    • Online. From what we have noticed, most small claims courts do not accept lawsuits filed online. This is called electronic filing or e-filing. If the small claims court you are filing accepts your lawsuit electronically, be prepared to use a complicated system designed for law firms. Go to your local small claims court website to find out if they have adopted e-filing and which system they use. Be prepared to pay an additional transaction fee as well.

    The information above is generalized to encompass the process in most small claims courts. Always confirm filing with the court before you follow the above procedures. If you do not follow the correct filing procedures for your local small claims court the court will reject your lawsuit. To confirm this information you can check your local small claims court's website or call the clerk.

    Step 3: Serve the Small Claims Lawsuit

    After you file your small claims lawsuit, you will need to notify the other party you are suing for money owed. Remember, this is called “service of process” or “serving.”

    Depending on where you file your small claims lawsuit you will have different ways of serving the lawsuit. Generally, these are the people that can serve the lawsuit: 

    • NOT YOU! You cannot serve your own small claims lawsuit.

    • Court Clerk. The court clerk may be able to serve the lawsuit. 

    • Process Server. Process servers are licensed professionals, this is what they do for a living so they are pretty good at it. 

    • Sheriff. Not all sheriffs serve small claims lawsuits. Depending on the county where the other party needs to be served you may be able to use the sheriff. 

    • Friend or family member. You can have an adult friend or family member serve your small claims lawsuit. They can’t be involved in the lawsuit or with what happened with the lawsuit. 

    Always confirm how to serve the lawsuit with your local small claims court as these are just the general ways serving works. 

    The Small Claims Court Hearing

    Once you file your case, you will get a hearing date scheduled anywhere between 30-70 days later. Note that during this time, the debtor may call you to try and settle the case.

    To prepare for your small claims court hearing:  

    • Prepare your evidence. This may include invoices, contracts, receipts, etc. You want to have your evidence organized with titles, dates, and why that piece of evidence is important. All your evidence should be geared towards showing the judge why you should win. For example, if you claim your friend owes you $1,000 you need to show evidence of that amount. Maybe you have a bank statement or maybe you signed a contract that states this amount. 

    • Prepare what to say. During the hearing, the judge will ask you why you are suing. For example, are you suing your landlord for refusing to return your security deposit, or are you suing your roommate for a loan they have not repaid? 

    • Get your receipts for costs ready. For example, your filing fees and any process server costs. Make sure to let the judge know that you would like to be reimbursed for these costs if you are able to be awarded additional court costs in the event you win.

    • Print enough copies of all your evidence. You will need at least three copies (one for you, one for the judge, and one for the other side).

    Are Attorneys Allowed to Represent You in the Small Claims Court?

    Depending on your local small claims court, you may hire a lawyer to represent you at the hearing. However, some small claims courts do not allow lawyers to represent you in court. For example, in California, you can ask a lawyer for legal advice but they cannot represent you in small claims court.  

    Usually, you can decide whether to have a lawyer represent you in court or not. This decision is up to you to make, and although getting a lawyer seems like an obvious decision, it is important to note that legal fees can quickly add up. This shouldn’t discourage you from proceeding with small claims on your own.

    Alternatives to Small Claims Court 

    Small claims court may not be your only option. Most states also have a process called mediation where you can try to settle your dispute outside of court.

    What is mediation and how does the process work? 

    • Mediation is a meeting between you, the party that owes you money, and a neutral third person called a mediator

    • At mediation, you can try to settle your dispute with a mutually agreeable solution or settlement. The settlement can be for the same amount of money being claimed and can involve other non-monetary agreements between the parties. For example, if the person you lent money to owes you $3,000 but can only pay $500 a month you can make a binding settlement or agreement at mediation that states this person will pay $500 a month until the $3,000 is paid, along with any other conditions you both set at mediation. 

    • The mediator's role is to help you and the other party resolve your conflict. If you resolve your conflict, you don’t need to go in front of the judge. 

    • You will still need to bring all your evidence to work through your conflict with the other party and the mediator. 

    • If you do not reach a settlement or agreement during mediation you may continue to pursue your case in court.


    Camila Lopez

    Legal Educator @ People Clerk. Camila holds a law degree and is a certified mediator. Her passion is breaking down complicated legal processes so that people without an attorney can get justice.

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