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Can I Sue Someone Who Owes Me Money?

Person checking empty wallet when they owe money

Yes, you can sue someone who owes you money. When someone keeps "forgetting" to pay you or flat out refuses to pay up, the situation can quickly become frustrating.

You can take the issue to a small claims court and pursue legal action if it meets the minimum and maximum money thresholds.

Money Threshold for Small Claims Court

Check your state's small claims case money limit first before considering legal action. You can search for the terms "[your state] money owe small claims court" or "[your state] money claims conciliation court." Look for a .gov website with an answer, or call a small claims court attorney with questions.

For example, Oregon small claims courts allow any case up to $750. Cases requesting $750 to $10,000 can go to small claims or civil court. Any cases recovering over $10,000 need to go to civil court or a local superior court.

Small Claims Judgment 101

Small claims court exists to give two or more parties a place to state their side of the story. However, you should carefully consider if suing someone is the right course of action.

You will prepare your case, file a complaint, and then a judge will hear the case and provide a final ruling based on the evidence you present. The cases and resolutions tend to be quick, and both sides must obey the judge's decision.

While you can usually bring an attorney to some small claims court, many people choose to represent themselves to save money. Some states don't allow you to have an attorney at all.

Note: If the money owed is due to rent, housing, or pending eviction, you should know those laws in your state. Debt involving real estate, eviction, personal injury, security deposits, unfilled contracts, and other small claims lawsuits may have specific rules in state courts.

Owing Money: Legal Definition

There are some guidelines you need to follow to sue someone for owed money. You obviously can't gift someone money and one day decide you want it back. You also can't loan someone money but never tell them you expect to be paid back.

In the legal sense, owing money must include:

  • Clear expectations this is a loan
  • Both sides understand there is a legal duty to pay the money back
  • A date when the payment, payment plan, or payment installment is payable
  • The payment date has arrived or passed
  • Some physical or digital record of the money owed or given

Typically, it is a good idea to create a contract for money loaned, money owed, or any personal property you lend. Other ways to show evidence can include emails, texts, money transfer receipts, bank account transfer history, etc.

It can be hard to prove your case if you verbally discussed a loan, gave them cash, and have no record of discussing paying the money back.

Suing Someone for Loans or Debts 101

To show your case in the best possible light, it is a good idea to try other methods of debt collection first. Be sure to ask for the money — preferably in writing — so there is a record of your attempts. This is called a "demand letter."

Even if the debtor doesn't answer you, you should ask them multiple times for the exact dollar amount they owe. It is a good idea to tell them you will pursue legal action as a next step.

You can also consider professional collection agency services that work to retrieve personal loans. If other debt collection methods have failed, you need to follow steps to take the matter to small claims court. You can also consider mediation instead of court (many small claims courts will send you through mediation first).

This is also the time to consider if you want an attorney at your side in small claims court. Not hiring one can keep costs low, but the case may take longer, and you could possibly have a better outcome with professional representation. An attorney is also a good idea if the debt is too large for small claims court and you need to file in district court. Depending on your circumstances and the type of case, you may be able to have legal aid provided free of charge.

Step 1: Filing Your Complaint and Paying Filing Fees

First, check the thresholds for the amount of money you are requesting and the correct court to file in. If the amount is too small or too large, you won't be able to file in small claims court.

File a complaint with your county and pay attention to the forms and documentation the case requires. You will need to pay some court costs — typically under $100 — to file the paperwork.

Step 2: Serving the Lawsuit and Court Dates

The fee you paid may go toward a court official "serving" the case. This means they will find the person who owes money (the "defendant") and give them official notice that they are being sued by you (the "litigant"). You might also be able to serve the defendant yourself through certified mail.

During this phase, you should gather evidence, practice speaking about your case, and prepare yourself for court.

Note: If the person you wish to sue filed for bankruptcy, their bankruptcy will trump your case. The "automatic stay" in bankruptcy stops anyone from collecting debt, even lawsuit debt. You may have options to collect the money when their case is decided. The bankruptcy judge may also rule that they must pay you back.

Step 3: Attend Court Hearing

Be on time for your court date. You can expect the court hearing to be quick — typically around 15 minutes total. If you are nervous about what goes on during a hearing, you can sit in on small claims court cases in advance.

You will need to show your documents and provide evidence that the other person owes you money and has ignored or refused to pay you. Answer all questions and be polite.

Step 4: Final Ruling and Collecting Debt

If the other person doesn't show up to court, there will be a "default judgment" in your favor. The judge can rule that the person must pay. However, this doesn't mean they will automatically pay you.

You still need to collect the money by:

You can have an attorney help you through the whole process or step in at the end to enforce getting your money. Even after a good outcome in small claims court, getting a debtor to pay can still be drawn-out and complicated.

You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help

Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.

Or contact an attorney near you:

Next Steps

Contact a qualified attorney to help you with preparing for and dealing with going to court.

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