You want the money you are owed, but you don't want to fight it out in a small claims court trial. Many litigants have the same dread but file anyway, because filing the small claims suit often is enough to persuade the other party to begin serious settlement discussions. If you can't achieve a settlement by the time the court date approaches, you can always drop the suit.
Settling Is Encouraged in Small Claims Court
Dockets in courts of all levels are crowded, and small claims court judges are busy. Because of this, the court system encourages litigants to settle their differences amicably and dismiss the case.
Settling a case means resolving it on terms that are agreeable to both parties. Generally a case settles for less than the plaintiff asks for in her complaint but more than the defendant admits is owing.
All courts are open to small claims court settlements, but some, like California small claims courts, even provide mediators to help the parties reach an agreement. If your court system offers this type of help, use it. If not, consider hiring a neutral mediator who can assist you.
Writing up the Settlement
If you use a mediator, she will help you craft the settlement agreement, get both parties to sign and date it and file it with the court. If you work out a settlement on your own, follow the same procedure. This forces both parties to be sure they are on the same page when it comes to settlement terms and allows for filing the settlement agreement with the court, if necessary. Once the agreement is completed, you should prepare and file a request for dismissal of the small claims court complaint.
Dismissing Without Settlement
If no settlement is reached and the court date approaches, you can still file a request for dismissal of the case. Use the appropriate form and mark whether you wish the dismissal to be with prejudice -- meaning you cannot file the case again -- or without prejudice. Filing without prejudice means you can file a similar case based on the same facts in the future.