Sue?

It costs money to sue...collections is about getting as much of the debt as fast as possible; a judgment does not necessarily mean the owner will get paid promptly.
Also, if they don't own the debt, but are contracted to collect for the creditor, they may not sue without the permission of the creditor.

that's like asking why a creditor even bothers with collection agencies and why don't they sue imediatly upon default. It would be a bad bad world if they did. I can see debtors prison coming back.

moreover, suing does not mean necessarily winning. if the debtor has adequate proof then the plaintiff might not get anything, right? so why risk so much and go into all that complication?

On contingency collections, it all comes down to $$$$. CA's are cheaper based on the fees that the client has to pay. Example...a brand new AMEX charge off, called a first placement may pay 25% to the CA. A second, third or 4th placemnent may pay 35-40% in collection fees. Placing with an attornies office for legal action results in 40-50% in collection fees right off the bat. I remember our credit card collectors always trying to avoid forwarding accouts on the attornies office although they would as a last resort. If the CA doesnt collect, they dont get paid!

I agree with everyone here.

A) It is up to the owner of that debt whether to sue. In the case a CA is just collecting for the creditor, it is not their choice to make.

B) The owner of that debt will have to pay upfront costs to file the case. Court filing fees, summons and private investigators might cost the creditor $3-400 up front just to go to court. Yes, these will all be tacked onto the judgment balance if the creditor wins. But like Morningstar said, a judgment can remain open for years and still not get paid; or the person might go bankrupt after they get sued. Sometimes filing a lawsuit is "throwing good money after bad."

I would think it would be easier and cheaper for them to try and settle the account with the person who is in default rather than sue them. If they can come to some kind of settlement agreement together that works for both parties and each end holds up their end of the deal then the problem can be solved this way, rather then going through an expensive court hearing. For the debtor side of it, you would want to make sure that you are getting a payment arrangement that you can afford so that you are not defaulting half way through and for the creditor end of it, you would want to have the agreement that works for both sides, if your expectations are far beyond what the debtor can afford it is very unrealistic to expect a positive outcome. So you need to be reasonable on both ends of the issue. I have been there and it took a while but eventually they came down to some sensible arrangements that I could afford and it was a win, win situation for both of us.