Money Owed to you by a Friend and how to recover it
Private Loans do not necessarily have to be provided by a bank, building society or financial institution. It may provide some comfort to know that if you are owed money by a friend, there are thousands like you. Anyone with a will to do so, can lend money to anyone they like for any number of reasons. From buying a car to debt consolidation, there are almost as many people wanting to lend money to you as there are people wanting to borrow it.
Also, money can become owed for goods and services that were provided by one party on the promise of payment from the other. If that promise is not met, then money or goods need to be collected. Person loans between friends and family members is nothing new but when agreements get broke, tensions can rise.
If a friend decides that he doesn’t want to pay you back the money you lent them, there’s nothing you can do. Right?
The first action you take should be before the loan is made. A measure that will help you protect yourself:
Put it in Writing
Probably the most important advice you can take is to put the agreement you are making down on paper. It can be difficult to broach the subject of formalising the loan, especially when it comes to friends and family, but it is the only evidence that a transaction has taken place and is the only thing proving that you are owed money.
The official document will need to be signed by both parties and will outline details of the sum of money, the time it is being paid over and the interest, if any, that will be accrued. It is essential that this step is taken or you may not have much of a chance of recovery.
So, you’ve got it in writing and payments are being missed. What can you do?
First of all, be polite. If you enter the discussion in a combative mood, then you’re much less likely to reach an amicable conclusion. Most problems can be resolved, reaching an agreement via polite conversation.
Next – If conversation fails to bear fruit, then put your requests for payment in writing. Incremental past due notices can be used to create a paper trail, which illustrates your commitment to being repaid and can be as evidence used in court.
Consider Reaching a Compromise Agreement
If you feel that compassion is the best course of action or you don’t want to go through that stress, then you can amend the original arrangement with either a reduced amount or an extended time frame that better suits their circumstances. It can often be a move that can save face for the lender and in turn, a friendship.
Seek Professional Help
Should there be an impasse and all of your personal attempts to recover your debt fail, then it is time to talk to a professional. A Private Debt Collection specialist can assess the situation and act on your behalf without the need for expensive lawyers or court action. Money owed by a friend can be a real headache but it can pay to know there are specialists who are ready to help.
A Professional Debt Collection specialist will guide you through the process and advise on the best course of action. Lending money, especially to friends and relatives can be tricky, so remember to be smart and take action if somebody is taking advantage of your good nature.
We are a Local Debt Collection Agency that provides a Nationwide service so give us a call today to find out about your options to collect money owed by a friend.