As available credit is shrinking in the United States, the tendency for the business community is to take a closer look at monies owed and attempt collection of their receivables through various means, including filing a law suit.
Renowed commercial litigator Harold Stotland of Teller, Levit & Silvertrust in Chicago, IL (founded in 1920) suggests a review of several indicators to determine if a law suit would be truly effective in collecting a bad debt.
Mr. Stotland stated; "Sometimes the most difficult part of a lawyer's job is to say no to a client. The job of a good creditor's attorney is to maximize the monetary recovery for their client...it's all about the money".
The situations when a creditor should strongly consider not to file a suit are as follows:
1. If the known defendant is not collectible (no assets or worse, no assets and a potential counterclaim)
2. If the small claim is the tail end of a larger contract
3. If a suit is initiated by malice, intent to harm or make and example of the debtor
4. If suits are initiated by professionals agaist former employees
5. If the major part of the balance due represents late charges or open interest
Harold Stotland, JD is a principal with Teller, Levit & Silvertrust, PC (in Chicago, Illinois) where he directs and supervises the firm's Commercial Collection Division. Mr. Stotland's points are not meant to constitute legal advice. Consultation with an attorney regarding any legal issue is recommended. For more information, please contact TL&S at: (www.tellerlevit.com)
