What is the best practice when a dispute may require litigation?

• A. Ignore the dispute and proceed
• B. Escalate to supervisor, gather evidence, determine if litigation is appropriate, and follow deadlines and procedures
• C. Immediately file a lawsuit without evidence
• D. Refer the dispute to the debtor's attorney

Answer: (B)

When a dispute may require litigation, the best practice is to pause and follow a structured process: escalate to a supervisor, gather and organize all relevant evidence, evaluate whether pursuing litigation is appropriate, and strictly adhere to deadlines and procedures.

Escalating to a supervisor ensures that the issue receives experienced oversight, policy alignment, and a proper risk assessment before moving forward. This step helps allocate the right resources and confirms that the planned action fits internal guidelines and legal constraints.

Gathering evidence is essential to build a solid record. Collect contracts, account statements, all communications, proof of services or charges, and notes of conversations. A well-documented file supports any claim or defense and clarifies the facts, making it easier to assess the strength of the case and to anticipate possible defenses or counterarguments.

Determining if litigation is appropriate saves time and money and avoids unnecessary escalation. Consider the legal merits, applicable statutes of limitations, jurisdiction, potential remedies, costs of litigation, and the debtor’s ability to pay. Also weigh alternatives such as settlement, mediation, or demand letters if they could resolve the dispute more efficiently.

Following deadlines and procedures is crucial to keep the process valid. Courts impose strict filing deadlines, notice requirements, and procedural rules. Missing a deadline or filing incorrectly can result in dismissal, sanctions, or weakened leverage.

Together, this approach preserves the integrity of the process, ensures compliance, and supports an informed, strategic decision about whether to pursue litigation.