Updated: Oct 14, 2019

By; Rena McDonald - McDonald Law Group

At McDonald Law Group we have assisted a diversity of businesses with everything from start-up, to management and winding-down. Through our many years of representation, a common concern is ever present for business owners... How do I collect?

In order to save costs, we have found that a majority of business owners prepare their own agreements or use online drafting services. These agreements are often vague and do not contain the necessary or correct language which leads to ambiguity and confusion as to the terms. In legal agreements, every provision and word counts, and missing even one important piece could force you to forfeit any monies that would have been rightfully owed to you had you written the agreement properly. Spending money now to have the proper agreements in place could save you thousands of dollars in the future.

When a business doesn't use good agreements, they are forced to try and collect, decide whether to 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 believe that litigation should be a last resort and several factors should be evaluated before you commit to filing a lawsuit.

Is it worth it? First, you must weigh the financial costs litigation will place on you compared to the possible results. Litigation often costs thousands of dollars, and even if you prevail you will not see the benefits until the litigation is resolved. In addition to the actual costs, litigation is stressful and time-consuming and the aggravation of a lawsuit may not be worth the amount you are attempting to collect. Litigation can take a very long time and does not ensure immediate resolution of your issues. 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 simply 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.

Prior to filing litigation, you can attend mediation. A mediator is an independent third-party whose sole purpose is to help the parties settle their disputes. Mediators will hold a mediation where they will meet with each party separately, hear their side of the story and then use this information to attempt to reach a settlement. Mediation is less time consuming and often more effective than litigation.

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.

The person or entity you are trying to collect against may be "judgment proof", meaning that they have filed bankruptcy, they have no assets, or any money they do have or receive is legally uncollectable. You may very well spend thousands of dollars, win your lawsuit and never see a penny from the Defendant.

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, McDonald 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.

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


Rena McDonald is the managing partner of the McDonald Law Group who practices in the fields of Bankruptcy, Foreclosure Prevention, Real Estate Litigation, Estate Planning, Family Law, Personal Injury Litigation, Contract Litigation and Review, and Small Business Development with an emphasis on Entity Formation and Real Estate Development. To Learn more about McDonald Law Group, please CLICK HERE

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