When a friend asks to borrow money, you just know that they’re in a hard spot. So, it’s natural to want to oblige and give your friend the funds they need to get out of trouble.
The real trouble often comes later, though, when it’s time to repay the loan. Your friend may conveniently forget to pay you back or claim not to have the funds, putting you both in a somewhat awkward situation.
Thankfully, you do have options when you have a friend not paying back money owed to you. Here’s a look at the seven most effective ways to get your friend to repay the loan you gave them.
Provide Regular Reminders
When life comes at your friend hard and fast, it’s easy to forget a loan that doesn’t have interest and late fees linked to it. So, start by offering regular reminders that you’re expecting the money back soon.
You can send a text or email, but it’s best to request the money back in person. That way, you can keep the friendship alive while you get over this bump in the road.
Create a Repayment Plan
Your friend may need some help figuring out the best way to pay you back. If that’s the case, consider helping them create a mutually acceptable repayment plan.
You will just need to reflect on when you need the balance paid off and look at their finances to find a great schedule. Align the payment dates with your friend’s paydays to ensure they have the funds available each time.
Consider the Money a Gift
Is your friend going through a really rough time? If so, you might want to consider the money a gift instead. You’ll want to reflect on the amount owed and whether your finances can take the hit. Only consider the loan a gift if you’ll be okay without getting the money back.
If that’s the case, let your friend know you’re going to forgive the loan as a one-time favor. With this move, you’ll get to feel good about helping someone in need. As for your friend, they’ll breathe a sigh of relief from not having to drum up the funds to pay you back.
Let Them Work It Off
You undoubtedly have things you need to get done around the house. So, why not ask your friend to repay the loan by working it off?
You can get help completing your home improvement projects and other chores. And they’ll get to repay their obligation without having to find the cash to do so. It’s a win-win for everyone.
Just be sure to agree on a set hourly or project rate before starting. That way, you both know when the loan is paid off in full.
Ask to Do a Trade Instead
Do you and your friend love the same hobbies, like driving RC cars, playing musical instruments, or crocheting? You may be able to ask to do a trade for the money owed, leaving you both satisfied with the deal.
Talk to your friend to see what hobby gear, supplies, and other items they might be willing to offer. Then, work together to determine if the items are equivalent to the loan balance. Once you complete the trade, wipe out the loan balance and go enjoy your shared hobby together.
Have Them Pay Your Way
If your friend simply does not have the funds to pay you back, let them nickel and dime the balance down over time. You can do this quite easily by having them pay your way until the loan is fully paid off.
Whether you’re going out for coffee, grabbing lunch, or seeing a show, your friend can pick up the bill for all your joint activities. Keep track of your portion of the expenses and subtract them from the loan balance bit by bit.
Sue Them in Small Claims Court
When your friend is not paying back money owed to you, it might just be time to sue them in small claims court. You must move through the proper steps to get great results when suing someone who owes you money, such as:
- Write a demand letter that highlights your intent to sue
- Gather evidence showing that your friend owes you money
- Confirm you have enough money to cover the filing fees and serving costs
- Prepare and file all the paperwork needed to start the lawsuit
- Serve the court paperwork to your friend as required by law
After that, you just need to show up to court on the indicated date to present your case. The court will rule in your favour if your friend does not show up. Otherwise, the judge will hear the case and decide how to rule based on the testimonies and evidence presented by both parties.
Want to simplify the process of getting your money back from your friend? Look to Dispute for help creating demand letters, generating lawsuit paperwork, and more. Through our technology-focused platform, you can easily start the process with confidence that you’re on track to getting your money back.