How to Settle a Small Claims Case in Connecticut

Settlement Is Always an Option

You can settle a Connecticut small claims case before or during a hearing. Most magistrates encourage settlement discussions. An oral promise or handshake does not close the court record; the agreement must be documented and filed through the court's process.

But "settling" in small claims is not just agreeing on a number and exchanging money. If you do not handle the paperwork correctly, you can pay the agreed amount and still have an active judgment on the court's record.

How Settlement Typically Happens

Before the hearing. The defendant contacts the plaintiff (or vice versa) and they negotiate a resolution — a reduced payment, a payment plan, or some other arrangement. If both sides agree, they put the terms in writing and submit them to the court to close the case.

At the hearing. Connecticut small claims magistrates often start by asking whether the parties have discussed settlement. In standard small claims cases, this is voluntary — neither party is required to negotiate. In housing-related small claims (like security deposit disputes routed to a Housing Session), the court routes both parties through mandatory mediation with a housing mediator under CGS § 47a-69 before the case reaches the magistrate. If the mediator helps the parties reach an agreement, they sign a Stipulated Judgment on the spot.

After the hearing. Even if a hearing has started, the magistrate may pause proceedings if the parties want to discuss a resolution. This is less common but not unusual.

The Two Ways to Close the Record

Once you have reached an agreement, the court needs one of two documents to close the case:

Stipulated Judgment. Both parties sign a written settlement agreement specifying the terms — how much will be paid, when, and in exchange for what. The court reviews and approves it, and it becomes an enforceable judgment. This is the safest option for both sides because the agreed terms have the force of a court order. If either party breaks the agreement, the other can enforce it through the court.

Withdrawal of Action. The plaintiff files a formal withdrawal form with the clerk, terminating the case entirely. This is appropriate when the defendant has already paid the settlement amount in full. The plaintiff should file the withdrawal promptly — if you pay and the plaintiff delays filing the withdrawal, the case stays open on the court record.

Protect Yourself When Settling

Get the terms in writing before paying. An oral promise to drop the case means nothing if the plaintiff changes their mind. Write down the amount, the payment date, and the plaintiff's obligation to file a withdrawal or stipulated judgment. Both parties sign it.

Require the plaintiff to file the withdrawal as a condition of payment. If you are paying the full settlement amount upfront, make the payment contingent on the plaintiff filing the withdrawal that same day, or structure it so you pay after confirmation that the withdrawal was filed.

Keep proof of every payment. Pay by check, money order, or bank transfer — something that creates a paper trail. Cash payments are hard to prove later. Get a written receipt from the plaintiff acknowledging the payment.

File your answer anyway. This is the mistake that costs people. You start negotiating with the plaintiff, assume the case is going to settle, and skip filing your answer by the Answer Date. Settlement talks do not toll your deadline. If the deal falls apart and you missed your Answer Date, you can be defaulted and the court may enter judgment. File your Form JD-CV-40A first, then negotiate.

What If the Other Side Breaks the Agreement

If you signed a Stipulated Judgment and the plaintiff collected the payment but did not fulfill their obligations (like returning property or canceling a debt), you can file a motion asking the court to enforce the stipulation.

If you paid a settlement under a withdrawal agreement and the plaintiff never filed the withdrawal, contact the court and provide proof of payment. The Centralized Small Claims Office at 860-756-7800 can answer questions about the court record and filing status.

The Connecticut Small Claims Response Guide includes a settlement negotiation worksheet and a checklist for making sure the court record closes properly after you pay.

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