I had the unfortunate experience of working for a collection agency as a legal asst. once. I lasted long enough to know they are extremely effective. They will garnish wages, bank accounts and file lawsuits/summary judgments to put liens on assets such as residences and such at the drop of a hat. I believe as a business owner you get a portion of what they are able to retrieve.

Also, back in the 80's I worked for a criminal defense lawyer who kept putting off paying me. I finally quit and went to the labor board, but he told them I was a consultant and not an employee (and got away with it b/c after all he'd never paid me), so I filed a complaint against him. I got him properly served and then it became a cat/mouse waiting game because he kept sending dr. notes as to why he couldn't appear in court. I finally won because his dr. dated his note for the wrong year and the clerk happily declined same. It was quite another thing collecting on the judgment, but that eventually happened as well.

IMHO, I think after all is said and done, it might be easier to write off small bad debts on tax returns because of all the time invested in waiting out getting paid.

But if I have one suggestion for all small business owners, it would be to paid by check at least once because if you ever do have to sue someone, you will most likely need to know their bank name and acct. no. Maybe there are easier ways to gain that knowledge in the virtual age and such. I'm just saying.

Sue