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Collection Issues Faced By Small Businesses and the Decision to Sue

At Premium Law Group we have assisted a diversity of businesses with everything from start-up, to management and winding-down. Through our representation of small business and being a small business ourselves we understand the challenges that these businesses face from start to finish. One of the most difficult challenges our business clients face is trying to collect on funds due and owing to them, whether it be from a contractor, another party to an agreement or former employees.

The majority of the time, our clients run into collection issues because they did not have a strong agreement. Often times clients prepare their own agreements and do not realize that they left out necessary language or provisions until they are facing issues collecting. In legal agreements, every provision and even every word counts, and missing even one important word could force you to forfeit any monies that would have been rightfully owed to you had you written the agreement properly.

Now you are forced to try and collect and are facing the decision of whether you should file litigation or just “eat” the loss. There are other options outside of filing a lengthy lawsuit or forfeiting the monies owed to you. It may seem odd to have an attorney talk about the benefits of not litigating a case, but we spend a lot of our day having this discussion with our clients. Unfortunately, in our society, litigation is a part of everyone’s lives. Every day, we listen to people considering suing someone to resolve their issue. Litigation should be a last result and several factors should be evaluated before you commit to filing a law suit.

Is it worth it? First you must weigh the financial and emotional strain the litigation will place on you compared to the possible results. Even if someone has “wronged you”, the aggravation of a lawsuit may make pursuing them cost you more than it would them. Litigation can take a very long time and does not ensure immediate resolution of your issues. It is also very stressful and no amount of justice is worth your health.

Have you tried other resolution methods? Las Vegas has many avenues available for Alternate Dispute Resolution or ADR resources. ADR can be anything from simple written requests for settlement to formal arbitration hearings.

Depending on the situation there may also be state agencies to which you can address your complaints. Licensed professionals have their own regulatory systems which may be a perfect place to air your complaint. For example, let’s say you sub-contract a job to a licensed contractor. If you are unhappy with their work, you can contact the contractor’s board and an investigator will review the situation, then a hearing with be conducted on your behalf. Civil litigation is not necessary unless you are unsatisfied with the results of that action.

You can use a mediator who is an independent third party. A mediator will help the parties settle their disputes. Mediators are very useful as they to keep things as civil as possible and attempt to have the matter resolved as quickly as possible and, more often is less costly avenue for parties involved in a dispute.

All of these ADR options will save you time, stress, and money

Lastly, Can you Ever Recover? Even if you successfully transverse the world of litigation and get a judgment in your favor, you may never be able to collect on the funds due and owing to you.

Unfortunately, in this economy, many individuals have no assets or are filing bankruptcy, so even after you have a judgment there may be nothing for you to collect.

Filing litigation for the sake of principal is not usually in your best interest. Finding ways to resolve your issues without litigation can be easier, cheaper, and less stressful for you. Of course there are situations where litigation is unavoidable in those situations hiring an attorney is imperative to protect your rights.

Over the years, Premium Law Group has successfully helped business owners with the formation of their businesses and the management of their businesses legal needs and with our Business Success Plan we are confident that we can help you manage your legal needs in a cost-effective manner. Please call us at (702) 448-4962 for a free consultation.

This information is provided for informational purposes only. It is not legal advice and does not constitute an attorney client relationship.


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