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Things to Consider Before Filing a Debt Collection Lawsuit

In collections, a lawsuit may sometimes be necessary. However, it should be avoided if at all possible.

Here are a few reasons you may want to avoid a debt collection lawsuit:

Cost of litigation: A debt collection lawsuit can be very effective, but it can sometimes cost more than it is worth.

There may not be any money: If the defendant has no assets or the ability to pay, the judgment may not be a true victory.

Possibility of a counter-suit: With all of the laws surrounding debt collection, if a defendant believes they can sue you for harassment or illegal methods for collection, they may try it. Often times, their defense attorney may encourage it.

How can you avoid a debt collection lawsuit:

Get as much information as possible:   Make sure you get as much information as you can, as well as references on new customers or patients just in case they do default.

Restructure payments: If it is possible, adjust payment terms that will be more compatible with the debtor’s ability to pay. Giving them a smaller payment over a longer period may help them if they are dealing with a decrease in funds.

Negotiate: Sometimes a reduced amount of even a small discount may be cheaper than court. Make sure to talk to a debt collection law firm to learn the most effective negotiation techniques and how far to go before deciding to file a debt collection lawsuit.

When you have done all you can do:

You have tried everything you could to avoid it, but a lawsuit is now the only option if you want to recover your debt. Seeking the help of a debt collection agency is going to be the best option at this point so you don’t waste any more time collecting your money.

Our collection attorneys have the training, experience, and the tools to make a collection successful.

No matter where you are in the debt collection process, contact us to set up your consultation. Our collection law firm will take the stress of collecting off of your shoulders.