Legal Question in Credit and Debt Law in California

Re: Collecting on a personal loan

In small claims court, you are limited to recovering $7,500. You cannot then file a second suit for the $2,500 balance. That is generally the only way you will be able to collect it without retaining an attorney to represent you. To sue for the entire amount, you will need to file a lawsuit in Superior Court (used to be called municipal court, but is now a limited jurisdiction matter). The complexities of litigation almost certainly dictate that you need to retain an attorney to file the action. If you want to put a lot of time and effort into learning procedure, you can try it on your own, but if you fail, it could adversely affect your ability to collect the money. Hopefully you have an attorneys fee provision in the loan documentation so you can recover the cost of suing him in addition to the $10,000 owed. The procedure for filing this lawsuit is way too complex to discuss on this board. Finally, you could turn it over to collection agency and let them pursue collections, however, you will give up a portion of the eventual recovery as a part of their fee.

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