When you think about it, so much of what we do on a day-to-day basis boils down to trust. We trust that people in cars driving around us are going to act responsibly and pay attention. We trust that the restaurants we order food from are going to prepare our meals safely and properly. And we trust that when we lend people money, they are going to pay it back.
But, as we all know, that trust is not always honored. Drivers text and use their phones, distracting themselves and causing accidents. Cooks and chefs make mistakes. And people do not always repay their debts.
For people or organizations that are owed money, the last resort to try and get someone to repay a debt is to sue that person. Making the decision to file a lawsuit is not an easy decision. Most people won’t file a lawsuit against someone they know who is unable to repay the debt. As well, filing a lawsuit to collect on a small debt can make the person filing the lawsuit look petty. And there are the PR concerns of being labeled as too aggressive in seeking to recover unpaid debts.
All of these factors — and many more — should be taken into consideration when making a decision to sue an individual for an unpaid debt.
It is unfortunate that lawsuits are required in certain situations. But, in order to continue operating, be it by needing money to lend money or by needing money to pay for employees and cover expenses, lawsuits are a tool that sometimes has to be used in order to be repaid what a company is owed. In the vast majority of situations, though, a creditor or collection agency has spent months or years trying to get in touch with the individual in question and has either been ignored or rebuffed at every turn. It is incredibly rare for a lawsuit to be filed against an individual who is in contact with the creditor or collection agency in question and who has made a good faith effort to repay a debt. It is only in those situations where an individual feels no obligation to repay a debt where a lawsuit needs to be filed.
Lawsuits are usually only needed when that trust between parties is broken. As long as there is trust in the system, there will not be a need for lawsuits.