To Sue or not to Sue, that is the Question

This is the first question to answer before jumping into a lawsuit. There will be times when it is better not to sue, even though someone owes you money.  Even if you have a perfect case and the Court gives you a judgment for gazillions of dollars, what does this mean?

A judgment is nothing more than a piece of paper. It says with authority that someone owes you money. It does not create the money for you. The courts do not collect the money for you after you get judgment.  It is your job to try to collect on your judgment. This makes sense.  In most cases, the lawsuit arises from a business relationship that you entered freely. 

For example, a small business gives credit to a supplier, who fails to pay the invoice. You took the risk by extending credit. Why should taxpayers pay to collect the debt you have from your own bad business deal? That means that you have to spend more money to try to get some money on the judgment.  If there is no pot of gold at the end of the rainbow, you will not have gained a thing, and you will have thrown away all the money you spent on legal fees too.

For example, if the company that owes you $25,000 has gone out of business, there may be nothing to recover.  A judgment against a company that has nothing is worth nothing.  Most of the time, you should already know if the debtor is in serious financial trouble. Many debtors try to ward off creditors by threatening bankruptcy. However, this is often an empty threat designed to make you delay. Unless you know that the debtor is bankrupt, do not be put off by the threat.  On the other hand, you could spend a lot of money getting a judgment, and then the person goes bankrupt on you. 

Some people tell me that they want to go after someone "on principle".  I tell them that they had better be prepared to pay a lot of principal to satisfy their principles.  People that sue "on principle" are typically very angry.  However, anger usually subsides, and by then they are in an expensive court case.  Now, the lawyer's bills are making them angry.

Often, I turn away potential clients when "principle" is the only reason for suing. Your lawyer has an obligation to assist you in collecting your money, but also to advise you when it is no longer worth your while. While it might seem odd that a lawyer might turn away work or tell you not to sue, in the long run, you will be more satisfied with honest advice than having an expensive judgment that is worth nothing.