What You Should Know about Small Claims Court

Decorative Scales of Justice in the CourtroomPeople don’t always deliver on their word.  Even though you were sure to get a rock-solid contract, people disappear or a business may just plain refuse to pay. This bad behavior leads many people straight to the courtroom.  If the contract wasn’t worth a large sum to begin with, however, you may wonder, is it really worth the hassle to pursue legal action?

You may think that if you were only scammed out of a small amount of money, then pursuing legal action isn’t worth the work of initiating and following through with a lawsuit.  After all, there will be papers to file and courtroom appearances to make.  But before you make this decision, you should know what to expect in small claims court.

Here are five truths to consider before deciding whether or not it is worth the hassle to pursue a case in small claims court.

1)   In New York City, the maximum you can sue for in small claims is $5,000.  If you want to collect more than $5,000 the ease that Small Claims can often provide is not an option.

2)  You don’t need a lawyer.  New York City’s Small Claims Court is surprisingly easy to navigate without legal assistance.  The majority of claimants and defendants in small claims court don’t have attorneys. The judge and the court staff are used to dealing with people without legal backgrounds.  The judge makes an effort to speak in plain language.  You can initiate an action simply by filling out a form with the clerk.  These efforts can make a small claims case much easier to manage while going about your daily business.

3)   You can choose between a daytime or evening court time. Many people choose the evening time because they don’t want to miss work.  This can be a good call, but on the evening you are set to appear be prepared to sit in the courtroom until 10 or 11 at night, it can often take some time for the court to dispose of your case.

4)   You should be willing and prepared to settle.  Small claims courts encourage settlement.  After you serve the other party he or she may suggest a settlement.  This can be a very good thing because if you settle, you don’t have to worry about chasing the money down later, which can be the most difficult part of the process (see number 5 below).

5)  You should have a plan to collect the money.  Unfortunately, many people refuse to pay even after a judge has ordered that they must.  For a small claims case to be worth your time, you need to know how you will get the money if the other party still refuses to pay after a court order.  This can be as simple as knowing where the delinquent party banks, but it can sometimes be more complicated.  Small claims is probably not worth the hassle if you don’t have at least some idea of how you might get paid in the end.  If you are going to pursue the action, make sure you have a payment plan in mind.

Have you ever brought a case to small claims court?  Did you find the process hard to navigate?  What do you wish you had known before jumping in? I would love to hear from you!

Five Things to Ask for When You Can’t Get More Money

Ripped DollarThe first thing everyone wants is more money.  I don’t want to discourage anyone from asking outright for a larger salary or an increased hourly rate.  After all, I have never heard of anyone reneging on an initial offer just because a contractor or an employee asks for more money.

If the other party is not willing to talk about more money, don’t despair.  There are other things you can ask for that can be almost as good as a larger paycheck.

Here are five things to consider asking for:

1)   More Vacation Time – This is an obvious ask and doesn’t require any additional, up-front finances from the company.

2)   Professional Development and Education – Ask the company to cover you for the time and cost to take a class that interests you.  Knowing more about a topic usually makes you better at your job.  This could be anything from a public speaking seminar to computer programming classes to Spanish lessons.  If you are in New York City check out Smartt Talk, General Assembly, or Brooklyn Brainery to get some inspiration.

3)   Transportation or Travel Expenses – Your employer could offer to cover the cost of your daily commute or reimburse you for business travel.

4)   Special Provisions – The beauty of this is that it can be ANYTHING.  Picture your ideal job – Do you wish you could travel more or less? Do you want a nicer office? A company car? Something else that those lucky people at Google get?  Propose the wild idea and see how the other party responds.

5)   A Scheduled Time to Re-Visit the Issue – If you aren’t completely satisfied, ask the company to give you a date in three or six months to discuss your negotiating points again. Regular and more frequent meetings mean more face time with the people that matter and more opportunities to talk up your skills and hard work.

Have you ever been pleasantly surprised when asking for more at a year-end review?  I would love to hear how the negotiations went!

Starting a Business on the Side – Protect Yourself!

This is the last installment of a four-part series on how to navigate taking on a side job or starting a business in addition to your regular employment.  If you missed the earlier parts, click here to read them from the beginning!

In all four of these posts I discussed various ways to protect yourself and your side business from potential hazards.  If you have considered these factors and decided to move forward with your new venture, there are a few last tasks you should take care of to cover all of your bases.

First, set up a company.  Even if you are contracting, and not creating an entirely new venture, you should separate your contracting business from your full-time job.  You can do this by forming an LLC, a corporation, or establishing your self as a sole proprietor.   There are low-cost ways to do this and taking this step can prevent major headaches in the future.

Either way you want to make sure that the money you receive from your new gig is kept separate from your full-time salary.  This will make life easier for your accountant later and allow you to write off expenditures for your side business.  You can do this easily by opening up a separate bank account for the new venture.  A separate bank account will keep you from mingling the funds until Uncle Sam gets his piece.

Keep in mind that a few simple steps early on can protect you from a host of hassles down the line.  It is always better to be over-protected when it comes to your money and your business.

Starting a Business on the Side – Be Careful What You Work On!

This is the third installment of a four-part series on how to navigate taking on a side job or starting a business in addition to your regular employment.  If you missed the first or second parts, click here and read them!

Yet another thing you want to be aware of is whether or not your current gig could see your side business as competition.

This does not have to be direct competition, like McDonald’s and Burger King.  Your employer could see anything in the same field or line of work (basically any kind of food making or selling from fine dining to packaged granola bars could be seen as competition for McDonald’s).

Once again, if you have an employment contract, you want to pay attention to the clauses on working for competition in it.  Many contracts restrict employees in working for direct competition both during employment and for some time after the employee leaves the company.

If you think your side business could be seen as competition, you should tread carefully.  Consider negotiating with your employer and getting an agreement set in writing about the nature of your business and what your employer is comfortable with you pursuing.

If you don’t feel comfortable approaching your employer or you want to keep the project entirely secret, know that you are taking a risk that down the line your employer may fire you for your behavior or demand some ownership in your side business.

When in doubt, you should get a second opinion before investing significant time or money into a side business to ensure that you won’t have to reimburse your employer for your hard work.

Starting a Business on the Side – When to Work?

This is the second installment of a four part series on how to navigate taking on a side job or starting a business in addition to your regular employment.  If you missed the first part, click here and check it out!

Once you have checked your contract for your employer’s restrictions on outside employment and decided whether or not to tell your employer, you need to consider when you plan on doing the bulk of the work.

When will you work on your side project?

If you currently have a job with chunks of downtime or you are salaried and don’t punch a clock, and you are hoping to freelance or start your own company during this time, you may want to consider your plan more carefully.

If you do the work while salaried or “on the clock” you employer might have an argument that anything you actually produce belongs to him.  This generally only becomes a problem when you least want it to, after your project has become successful.

For example, in the web development world, a developer who works for a fashion company might use her down time to write an amazing program that helps college kids sell their used books online.  This program appears to have nothing to do with fashion but if the program becomes successful the fashion company could want to use an element of the program to help people sell used dresses.  The fashion company could claim the developer created the program while working for them and thus they should be allowed to either a) use the program at no cost or b) be entitled to any profits the developer got from selling the program.  This is last thing you want when you have worked hard to create a successful business.

To avoid these issues entirely, you want to plan to avoid working during business hours and document this in case your employer ever asks.  If you have concerns that the business you want to create might not abide by these rules, you should consider trying to negotiate with your employer so the parameters of what will belong to you and what will belong to the employer is well-defined before you begin your side business.

As you start your side business, remember to pay attention to when you are working on your project and when you are working on your employer’s project.  If any entrepreneurs have a great time keeping system, I would love to hear about it!