Small Claims Court Settlement Before Hearing New York

You Can Settle at Any Point Before the Hearing

A New York small claims case can be settled before the hearing date, on the hearing date itself, or even after the case has been called. The court encourages settlement — it clears the calendar and gives both sides more control over the outcome than a judge's decision would.

The practical question is not whether you can settle, but how to do it correctly so the case actually closes.

How to Approach a Settlement

Contact the other party directly. If the plaintiff sued you for a specific dollar amount, you can propose a lower figure, a payment plan, or non-monetary terms like completing unfinished work. There is no formal mediation requirement before making a direct offer, though Community Dispute Resolution Centers across all 62 New York counties offer free or low-cost mediation if you want a neutral third party to help negotiate.

Put your offer in writing — even a text message or email — so there is a record. If the other side agrees, the next step is formalizing the agreement so the court knows the case is resolved.

Filing the Right Paperwork

Two documents close a settled small claims case:

Stipulation of Settlement. Both parties sign a written agreement spelling out the payment amount, payment schedule, and any conditions. If there is an installment plan, include specific due dates. This protects both sides — the plaintiff has an enforceable document if the defendant stops paying, and the defendant has proof of the agreed terms.

Stipulation of Discontinuance. The plaintiff signs a formal discontinuance — with or without prejudice — dismissing the action. Under local court rules, such as 22 NYCRR Section 210.16, the discontinuance should be filed with the clerk before the scheduled hearing date.

If a judgment was already entered before you settled (for example, a default judgment you are now resolving), the plaintiff must file a Satisfaction of Judgment with the clerk after receiving full payment. This clears the judgment from the public record.

What Happens on the Hearing Date If You Are Still Negotiating

If settlement discussions are underway but not finalized when your hearing date arrives, both parties should still appear in court. Tell the clerk or judge that you are in active settlement negotiations. The judge will typically give you time in the hallway or a mediation room to finalize terms.

If you reach an agreement that day, the terms can be placed on the record in open court, creating an enforceable stipulation immediately. If you need more time, the judge may grant a short adjournment — but that is discretionary, not guaranteed.

Do not skip the hearing because you think a settlement is close. If you fail to appear, the court will enter a default judgment against you regardless of any handshake deal.

Protecting Yourself in the Agreement

Make sure any settlement agreement includes:

• The exact dollar amount being paid
• The payment schedule (lump sum, installments, specific dates)
• A clear statement that the plaintiff will file a discontinuance or satisfaction of judgment upon receipt of payment
• Whether the discontinuance is with prejudice (the plaintiff cannot refile the same claim) or without prejudice (they can)

Push for "with prejudice" if you are paying the full agreed amount. A "without prejudice" discontinuance leaves the door open for the plaintiff to bring the same claim again.

The Responding to a Small Claims Case in New York guide includes a settlement checklist and walks through the full process of closing a case before, during, or after the hearing date.

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