Loaned a couple of grand to some bastard friend who wouldn’t pay back? Some darned client/company owes you some collectibles? If you are planning legal action to get back your money, you might want to think about the whole issue first. As with any thing, you have to weigh the pros and cons of small claims. It might just be impractical to seek legal action to something that’s inevitably futile.

The Good:

• You may get paid immediately after the case has been filed, or the other party subpoenaed. The fear of a court proceeding may be enough to scare some people to paying. In this case, it might just work.
• If the problem is usually cash, the good thing about taking it to court is that the judge may order the other party to liquidate other property to make up for the value that you are owed.
• If the debt is deemed uncollectible, it may be ruled as tax deductible bad debt which may give you or your business a nice tax break.

The Bad:

• Lawyer’s fees. And you know how much firms charge for representation.
• Proceedings can also take up much of your time.
• If your debtor decides to jump the border or go into hiding, then you may have also wasted your time.
• If the debtor’s totally broke, having the court order enforce may be worth much more than what you are bound to collect.