How to Get Your Money BackBy Caitlin in Posts
Loaning money to friends and family is usually a safe bet, especially if you know them very well and are capable of helping them out in a time of need. Unfortunately, sometimes we do find ourselves an awkward position – maybe it has been a substantial amount of time and you have had no sign from them for when they are planning to pay it back. Or, suddenly your situation has changed and you need that money urgently. Here are some ways you can go about recovering your loan.
1. What is their current financial situation?
Before you pluck up the courage to ask outright for your money back, it is a good idea to subtly work out how they are managing their finances right now.
If you know that they are still struggling to pay bills and that they are doing everything they can to save money, then you probably don’t need to worry that you won’t be getting your money back. Chances are, it is one of the reasons why they are curbing their spending so much.
If there is a way you can manage with not having the cash back straight away, rather than asking for the money back, let them know there is no rush to pay you back. This will serve to remind them they owe you money (if they had forgotten) and also reassure them if they are getting really stressed about their debt to you.
1. Offer advice on how to save money.
On the other hand, if they have recently been spending up large – and they haven’t mentioned anything about paying you back – one way to lead into the subject is to suggest ways in which they can save money.
Next time they invite you to the pub, you can invite them to yours or suggest a cheaper alternative. Make them aware that you are being careful with your money, and hopefully this will spark them to realise they should pay you back now that they are in a more comfortable position, or it will inspire them to be more responsible with their spending so that they will soon be able to.
3. Ask for it!
If you’ve tried both of the above approaches, yet the matter of the money they owe you still hasn’t come up… you need to ask them outright.
It might feel awkward, but the more you agonise over how to approach the subject, the harder it will be.
What is the worst that could happen? You might both be embarrassed but it will at least give you an opportunity to clear the air. And if it so happens that they deny owing you any money, you can look into debt recovery services to help you get it back.
4. Suggest a payment plan.
Once you’ve finally asked for the money back – or even at the time of when you ask for the money back – be open to a payment plan.
Depending on how much it is they owe you, if they haven’t already paid you back without prompting, it is likely they just don’t have the funds to be able to do so right now.
Let them know it is okay if they pay you back over a certain amount of time: if it’s $100 a month, at least you are getting something back – and they will likely feel relieved as well that their debt to you is slowly getting smaller.
5. Debt collection agency.
Sometimes you do need an extra hand. Talk to a debt collection agency about your rights and how you can go about getting the money back. This will be helpful if your friend suddenly stops returning your phone calls, or refuses to acknowledge what they owe – even though you may have a contract to prove it. Do not feel bad about getting a third party involved: this is not a true friend if they are going to take money from you like this.