Well, my experience with collections has been that it is best to take the case into court as soon as possible. Otherwise, the defendant is dissipating all the funds that could be used to pay the debt. If he has nothing left to pay you the judgment is not worth the paper it is written on.
There are alternatives such as filing judgment liens which will cause him a credit problem for years to come. They are good for the life of the judgment, but have to be renewed every five years by recording a continuation sheet. I just had that happen with a client several months ago. There was a judgment lien on file since the late l990's. Apparently the defendant wanted an extension of credit from someone or to sell his business. He needed a release of the lien. The only way he could get it was to pay the judgment. Legal interest had been running on the judgment the whole time. So the amount of the claim he had to pay doubled over the years.
If you are going the small claims route, make certain that you sue in the right state so that the court has proper jurisdiction over the person of the defendant.
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