It is always good to help someone else, especially if he is really concerned by his financial situation. However, unless you have bottomless pockets, you are probably going to want that money back at some point. There are a number of ways to collect money owed to you, hopefully without losing too many friends along the way.
Be clear right from the start
The best way to ensure that you collect money owed to you is to make it very clear right from the start that you expect the money back. Some people, especially if they are family members or close friends, may take you for granted and think that you will eventually forget that they owe you money. It can be difficult to be firm when someone is in dire straits and you just want to help him out. However, if you have said from day one that you are happy to lend the money, but that you want it back, preferably by a particular date, it makes it much more difficult for the other person to forget.
Be upfront and ask for it back
If you’ve been waiting for the money for a while and there doesn’t seem to be any sign of it being returned, it’s best to just be upfront and ask for it back. Hints don’t work too well and may just encourage the other person to avoid you as much as possible. Call on him when he is not expecting you and tell him that you really need the money back as soon as possible. If, for any reason, you feel threatened by the person concerned, take someone with you as back up, although don’t be tempted to start trading insults and threats. There is time for that, if really necessary, further down the line.
Suggest the money is paid back in instalments
If someone has borrowed money from you, the chances are that his financial position is not great. It may be that he wants to pay you back, but can’t – or at least can’t pay the whole amount back without getting into debt with someone else. Coming to an agreement about collecting the money in instalments is a good way to ensure that you get your money, but without leaving the debtee bereft. If you think it would help, put it all down in writing so that you both know exactly when the money should be paid and provide a receipt when it has been.
Find out what the problem is
It can be incredibly frustrating if you are owed money, but the person who owes it just doesn’t seem willing to pay it back. Before losing your temper, however, it is worth trying to find out exactly what the problem is. Some people become very embarrassed about owing money and may simply be trying to avoid telling you that they cannot pay it back. In most cases, bringing the issue out into the open is a good idea so that you can find ways of getting the money back in instalments, or perhaps even in kind. If the debtee needs a job, perhaps you can help him to find one.
Ask someone to mediate
You don’t really want to become too heavy-handed unless you have to, so it can be helpful to have a neutral person mediate for you. If the person who owes you money is a family member, it is probably best to ask someone from outside the family, perhaps a neighbour, to mediate. By sitting down and discussing different options in a calm manner, you may just be able to solve the problem. At the very least, if you do decide to go down the legal route later on, you will be able to say that you have tried all options and only filed a claim when it became apparent nothing else would work.
Let others know the situation
It isn’t really advisable if you don’t need to, but in some situations, it may be necessary to shame the other person into returning your money by letting others know about the situation. Friends or family of the debtee may come forward to help. Even if they can’t or won’t, they will at least then know that it isn’t a good idea to lend money to the debtee themselves. Of course, if you are owed a large sum of money, you may be forced to file a lawsuit in order to get it back, in which case, it could become a public matter. However, if you want your money back, it may be the only solution.
If you are prepared to stand firm and do all you can, there is no reason that you shouldn’t be able to collect money owed to you. How easily that happens really depends on the debtee and his motivation to pay you back.