That is a huge subject, and it might be worth a sit down with your legal counsel to determine some basic thresholds and collection costs involved by going down the various roads. First thing is what is the universe of bad debt, what sort of debt, and what are your options for collection in each case. Turning them over to a reputable collection agency, just attempting internal collection activities, taking legal action to obtain a judgement, repossession of collateral, foreclosure on real estate, etc.? You could break it all down into chart format and then maybe additionally add some dollar amount tiers.
As far as 1099-A and C reporting, that is not optional, but you really need to read the instructions for the triggers of the required filings:
https://www.irs.gov/instructions/i1099ac