Colorado Small Claims Court Settlement

Settling Before Trial

Colorado small claims disputes may resolve before a hearing through pre-filing discussions, negotiations, or court-connected mediation.

Settling is not giving up. A good settlement puts money in your hands faster than a judgment that the other side might not pay voluntarily. The question is whether the settlement terms are worth accepting.

Settlement Before Filing

Many disputes resolve once the defendant receives a formal demand letter — especially when the letter references small claims court. A landlord who ignored informal requests for a security deposit refund may respond differently to a certified letter citing C.R.S. § 38-12-103 and threatening a court filing.

If the defendant offers to pay at this stage, get the agreement in writing before accepting. A simple written settlement should include the amount to be paid, the payment deadline, and a statement that the payment resolves the dispute in full. Both parties sign. This is a private contract — the court is not involved yet.

Settlement After Filing but Before Trial

Once you file Form JDF 250 and the defendant is served, the pressure increases. Filing and service costs are real, the trial date is set, and ignoring the claim risks a default judgment.

If you reach a settlement between filing and trial, document it on Form JDF 75 (Stipulation) and submit it to the county court clerk. Once entered, the stipulation becomes a binding court order. If the defendant later fails to pay as agreed, you can pursue collection through the court rather than starting a new case.

This is a significant advantage over a private handshake deal. A court-ordered stipulation can be enforced through judgment-collection procedures such as garnishment or bank levies; an unfiled private agreement is not itself a court judgment.

Mediation Settlement

Colorado courts emphasize mediation for small claims cases under C.R.S. § 13-22-301. Some courts schedule mediation on the morning of the trial date. Others set a separate mediation session weeks before the hearing.

A neutral mediator helps both parties explore options and find middle ground. If you reach an agreement during mediation, it is documented on Form JDF 75, submitted to the clerk, and entered as a court order. The trial is cancelled.

Mediation is particularly effective for disputes between people who have an ongoing relationship — neighbors, business partners, landlords and tenants who may cross paths again. A mediated agreement can include terms both parties accept, such as specific repair timelines, payment plans, or behavioral commitments.

Settlement at the Courthouse

Even on trial day, settlement discussions continue. Parties often reach agreements in the hallway while waiting for their case to be called. If you settle at the courthouse:

1. Write down the terms immediately — the amount, the payment schedule, any conditions.
2. Both parties sign the agreement.
3. File it as a stipulation with the clerk before leaving the courthouse.
4. Confirm with the clerk that the trial is vacated.

Do not leave the courthouse assuming a verbal agreement has been entered as a court order. Submit the signed stipulation to the clerk and confirm whether the trial remains scheduled.

Payment Plans in Settlements

Defendants often agree to settle but ask to pay in installments. This is common when the defendant acknowledges the debt but does not have the full amount available.

If you agree to a payment plan, the stipulation should spell out:

• The total amount owed
• The payment schedule (dates and amounts for each installment)
• What happens if a payment is missed
• Whether interest accrues on the unpaid balance

Submit the stipulation on Form JDF 75 to the clerk for entry as a court order. If the defendant misses a payment, follow the entered order and ask the court about the available enforcement process; do not assume the full remaining balance is immediately collectible.

When Not to Settle

Not every settlement offer is worth taking. If the defendant offers 20 cents on the dollar for a clear-cut claim with strong evidence, going to trial may be the better path. Consider:

• How strong is your evidence?
• How likely is the defendant to pay a judgment versus paying a settlement?
• How much time and stress is the trial worth to you?
• Does the defendant have assets or income that could be garnished if they do not pay?

If the defendant is judgment-proof (no wages to garnish, no bank accounts to levy), a smaller settlement paid now may be worth more than a larger judgment you can never collect.

Our Colorado Small Claims Filing Guide covers the full process from filing through hearing, including how to evaluate settlement offers and what to include in a stipulation agreement.

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