Function

• The purpose of small claims court is to provide a judge and legal forum that can resolve "minor" legal disputes. The term "minor" is, of course, relative in nature. To you, $8,000 is a big deal, but in the world of disputes involving lawyers and judges, $8,000 is petty cash. Small claims court's purpose, then, is to allow a judge to resolve minor legal disputes without the need for complex legal procedures and attorney fees.
  
  

Geography

• Small claims courts are branches of state court systems. There is no such thing as a federal small claims court. In fact, unless your lawsuit involves a federal law, you can only sue in federal court if your dispute concerns at least $75,000. Because small claims courts function according to state law, the details can vary across the nation. It is always wise to review the small claims court rules in your own state before you proceed to file a small claims lawsuit.
  
  

Types

• Small claims courts typically only resolve disputes over money, and each state has its own thresholds for the amount of money that can qualify your dispute for small claims court. State thresholds range from $1,500 in Kentucky state court all the way up to $15,000 in Delaware state court. Small claims courts do not decide other legal issues, such as divorce, eviction or bankruptcy.
  
  

Features

• The primary benefit of small claims court is that the state court rules are different in small claims court. In a standard state court, the lawsuit operates according to strict rules of procedure and evidence. Lawyers and judges know these court rules, but lay people generally do not. In small claims, however, the same rules do not apply, which means you can proceed without a lawyer and you will be okay.
  
  

Warning

• If you are going to file a lawsuit in small claims court without a lawyer, you need to be aware of the statute of limitations on your legal claim. The statute of limitations provides a time limit on when you can file your claim. The shortest statute of limitations is one year, and in some cases extends up to six years. So, for example, if you sell a car to a friend on January 1, 2004, but your friend never pays you and it is now January 2, 2010, you have probably lost the right to file a small claims lawsuit because the statute of limitations has expired.