4 Ways To Collect A Loan From A Friend
It is common to loan a friend money for an emergency. You never know when you will get low on cash and need the same favor. However, it becomes a problem when your friend refuses to pay. Here are four ways to collect back a loan from a friend.
Ask for Repayment
If you loan your friend money and the repayment date has passed, then you need to ask for your money. Some people make the mistake of waiting for their friend to bring up the subject. You are thinking that you loaned the money in good faith and expect your friend to say he cannot repay the money.
Some people choose to ignore that person when they owe money. There is nothing wrong with asking for repayment, but be nice about it. The politeness may encourage your friend to start making payments.
Put Your Request in Writing
It is time to put your request in writing when your friend starts ignoring your phone calls. Writing a letter asking for repayment creates a paper trail. It also shows your friend you are serious about getting paid. You should keep a copy of the letters. If you need to file a lawsuit, then you can use the letters as evidence.
Debt Settlement Agreement
A debt settlement agreement is an option if your friend is having financial problems. It allows you to amend the original agreement. You can change the agreement by lowering the repayment amounts or giving your friend more time to pay back the loan. Most people make this decision to prevent from going to court or to save their friendship.
Call a General Practice Lawyer
You never want to take a friend to court, but if your friend is refusing to pay, then it is time to talk to a lawyer. However, the process is more complex than just taking your friend to court.
Your lawyer will try to collect the money first. He or she starts the process by writing a demand letter. Receiving a letter from a lawyer may encourage your friend to pay. If your friend still does not pay up, then you may want to take the case to small claims court.
It is always a good idea to only loan money that you can afford to give away. There is always a chance that the person may not pay it back. Many friendships have been ruined over money. However, it helps to know the different ways to get back your money.
Contact a legal professional such as Michael B. McCord for more information.