Top tips for collecting a Debt from a friend or relativeLast modified: October 27, 2023
Collecting a Debt from a Friend or Relative
Collecting a debt from a friend or family member is often a delicate situation. There needs to be an understanding of the background and how the debt came to be.
It is common for people to think that a debt collection service is something only businesses use. A great many people find themselves in a position where someone owes them money. When this happens, they are often unsure if they can use a debt collection agency themselves.
Whilst people have this perception, the opposite is true.
The services of a private debt collection agency are open to anyone. This is regardless of whether they are a business or a private individual. Frontline Collections is the UK’s leading private debt collection agency and assists 1000s of individuals every year.
Every day, we deal with instances of private debts which have occurred for all manner of reasons. One common situation we encounter is the subject of collecting debt from a friend or relative.
Many people loan friends and family money or buy goods on their behalf. But unfortunately, they are not repaid. This can cause a problem and relationships can break down over money someone owes you.
When this happens, you need a solution that is satisfactory to all parties. The intervention of a professional third party can help resolve the problem. It usually also results in payment as a closure on the matter.
In this article, our experts explain what you can do if you are collecting debt from a friend or relative.
Top 5 Tips for Collecting Debt from a Friend or Relative
Our premier debt collection is the best way you can resolve issues when someone owes you money. We have helped thousands of people recover millions of pounds worth of debt since 2005.
Whilst this is true, a good way to resolve debt is to prevent it from occurring in the first place. If you use basic communication and dialogue to resolve a personal matter and ot may also help restore a relationship and recover your money.
If you follow the steps below and the issue is still unresolved, it is best to seek help.
Collecting a debt from a friend or relative will always present a challenge but you can mitigate this by involving a third party to mediate.
Here are a few expert tips for help when collecting a debt from a friend or relative.
Get Any Agreement in Writing
Keeping a record of any financial or important matters is something that you should do. You should do this no matter what the circumstances are.
If you are loaning money to a friend or relative, you should always document everything to do with the agreement. You should also make sure that both you and the person you are loaning money sign an agreement.
This is like payment terms and conditions in a business situation. This may seem awkward or impolite to many people, and so they do not attempt this step. It is considered essential to get an agreement with a signature before committing any money.
If you have any doubt that you will not get the money back, you must take this basic step. In this document, you should make sure that the terms of the loan are clear and easy to understand. It is also a good idea to include any agreed repayment dates.
It is important to confirm that the person you are loaning money to knows their obligations. Taking this step will help later if there are any complications with repayment.
Make it Easy for Them to Pay
Many people collecting a debt from a friend or relative have issues when the debtor cannot pay them. This may sound like a simple measure, but if you make it easy for somebody to pay you then it is more likely to be done.
It will also prevent the scenario from arising of where you have to be collecting a debt from a friend or relative.
For example, if you have loaned a large amount of money to someone, they may not be able to repay you with one lump sum.
In circumstances such as this, you could set up a staggered repayment schedule. Helping the debtor set up a standing order will help them manage the repayments and ensure that you get your money back in a way that suits everyone.
Document Any Requests for Payment
If the person you have loaned money to misses a payment date, you need to let them know as soon as possible. You should send a polite letter or email with a message. This should advise them that their payment was due and they need to make it quickly.
Keeping a record of this is important, and is an important part of collecting a debt from a friend or relative.
Stay Calm and Composed
When a friend or relative owes you money, emotions can be a big factor in how you act when they withhold money from you.It is normal to feel frustrated, especially if you need the money yourself.
If you let your emotions get better, it will result in a breakdown and is likely to lead to no further payments. The best thing to do collecting a debt from a friend or family member is to stay calm and composed.
If you come to a point where you have exhausted all communication has and the debtor refuses to pay it is time to seek professional help. There are many options for help with collecting a debt from a friend or family member.
If you have sent a standard letter before action and they still have not paid owed monies, you need to consider the next step.
In most cases, the best choice is to instruct a professional debt collection agency.
Collecting a Debt From a Friend or Relative – Instruct a Debt Collection Agency
If a friend or family member owes you money, you may be hesitant to escalate the matter to a personal debt collector. Requesting that the person who owes you money pays you back does not make you a “bad person”, far from it. The bad person is the one who promised to pay back monies they owed.
Where any action is necessary about the issue of collecting a debt from a friend or family member, it does pay to speak to a professional.
For further information on our private debt collection services, speak to us today. We will provide a free and frank assessment of your situation and give you a clear idea of your options.