Posted on September 13, 2013 in Business Law
Collections disputes are an increasing concern for many Los Angeles area businesses. There is a delicate balance between aggressive collection tactics and business relationship preservation. A business should examine both the hard costs and the opportunity costs involved in a collections matter. The opportunity cost of the lost business relationship may well exceed the actual dollars that are recovered in a lawsuit. Rather than turning the account over to a buyer for mere pennies on the dollar, it may be more cost-effective to retain the counsel of an experienced Los Angeles business lawyer.
To be paid on a delinquent account, particularly if the debt is unsecured, traditional wisdom dictates that aggressive tactics are necessary. Indeed, a delinquent debtor may have very little motivation to pay the account, particularly if the debt is rather old. Aggressive tactics nearly always lead to positive results in any sort of litigation, and collections litigation is no exception.
Unlike in the age-old saying, “For every action, there is an equal and opposite reaction,” the laws of motion do not apply to your legal matter. There will be adverse reaction to any collections activity. A Los Angeles business lawyer can offer a comprehensive review of all the costs and benefits involved in your collections case.
Whether or not your business is willing and able to absorb these costs is a case-by-case decision:
- Alienated current customer: If you have an ongoing commercial relationship with a customer who owes you money, your options are not limited to the polar opposites of lawsuit or write-off. A current customer may be more amenable to negotiating the amount or the payment terms, so you can retain the customer’s business tomorrow while not sacrificing your bottom line today.
- Alienated future customers: A reputation as the company who sues people who fall behind may be something that your company wants to avoid. On the other hand, if the account balance is sufficiently high or the circumstances are particularly unique, a lawsuit may still be in order.
Contact an experienced attorney who can guide your business
The attorneys at Bradley and Gmelich have seen many economic changes in their 10 years of legal practice in Los Angeles. They know how to take a comprehensive look at your situation, and tailor a plan to fit your needs. Contact Bradley and Gmelich to schedule your confidential consultation.
Bradley and Gmelich
700 N. Brand, 10th Floor
Glendale, CA 91203
Collections disputes are an increasing concern for many Los Angeles area businesses. There is a delicate balance between aggressive collection tactics and business relationship preservation. An experienced Los Angeles business lawyer can provide effective collections solutions, which take into account both the hard costs and the opportunity costs.