Small Claims Court Calculator

Is Suing in Small Claims Court Worth It?

Many people rush to file a lawsuit in small claims court out of anger or principle, completely ignoring the basic economics of the situation. Winning a $1,000 judgment feels great, but if you spent 40 hours preparing evidence, driving to court, and missing work, you probably lost money overall.

Understanding Opportunity Cost

Opportunity cost is the hidden killer in small claims lawsuits. If your normal hourly wage is $30/hour, and you spend 25 hours dealing with a lawsuit, you just spent $750 worth of your time. If you are only suing for $800, and you pay $100 in filing and process server fees, your net profit if you win is negative $50.

The "Expected Value" Formula

In economics, Expected Value (EV) is calculated by multiplying the potential payout by the probability of winning, and then subtracting the costs.

• Payout: The amount you are suing for.
• Probability: Be honest with yourself. Most plaintiffs overestimate their chances of winning. A realistic chance is usually 50% to 70%.
• Costs: Hard costs (filing fees) plus soft costs (your hourly wage × hours spent).

Collecting the Judgment

Even if our calculator says you will make a profit, you must remember the golden rule of small claims court: Winning a judgment is not the same as collecting the money. If the defendant has no money, no wages to garnish, and no assets, your judgment is essentially a worthless piece of paper. Always consider the "collectability" of the defendant before filing.