Dispute logo

Products

Learn

Small Claims Court

What to do When a Friend Owes You Money

Updated April 29th 2022

4 min read

As a general rule, if a friend asks you for money, say no or just give it to them. But that’s not always possible for all. So, if you want to go ahead and lend money to a friend, you’ll need a plan on how to get it back. Unfortunately, unless you’re exceptionally lucky, they probably won't remember on their own....

What to do When a Friend Owes You Money

What to do When a Friend Owes You Money

author

Marie A

Author


As a general rule, if a friend asks you for money, say no or just give it to them. But that’s not always possible for all. So, if you want to go ahead and lend money to a friend, you’ll need a plan on how to get it back. Unfortunately, unless you’re exceptionally lucky, they probably won't remember on their own. Thankfully, you can use this guide to navigate this tricky situation and get your money back.

Lending money to a friend can be complicated, and asking for your money back can feel awkward.

Lending money to a friend can be complicated, and asking for your money back can feel awkward.

Ask Your Friend for Repayment Directly

If you haven’t heard from your friend who owes you money in a while, call them to see how they're doing. Then, once you catch up, ask for repayment of the loan directly. Keep it short and sweet while matching their tone and demeanor.

Gently remind them of the amount owed and your agreed-upon repayment terms. Don’t forget to tell them what you need to use the funds for, especially if you have to handle any immediate expenses.

Although they should pay you back without extra prompting, appealing to their emotions may encourage them to pay you back faster. If they agree to repayment, meet up at a casual place to settle the debt and catch up with your old friend.

Create a Payment Plan If Your Friend Can't Pay You Back Immediately

When you talk to your friend about repaying what they owe you, they’re likely to claim that they don’t have the money at that time. If that’s the case, you can work around their financial woes by setting up a payment plan.

First, you’ll want to determine how much they can pay you each month. Then, consider breaking it down into weekly payments to make things easier for your friend.

Let your friend lead the way in planning the payments to avoid overextending their finances. But make sure that the payments will make you whole in a reasonable amount of time.

Encourage Your Friend to Find Creative Ways to Earn Some Money

When your friend’s money troubles don’t seem to end, you may want to help them find creative ways to earn back the funds. You can work together in brainstorming fun side gigs that will bring in money fast.

Cleaning services, food delivery, and dog walking are good ways to earn extra cash when not at work. Make sure that you agree on a set percentage of their earnings that’ll go toward paying you the money they owe. Otherwise, their extra cash is likely to disappear before you are returned your money.

Take Your Friend to Small Claims Court

If all else fails, you may need to take your friend to small claims court. You can start with mediation, although it’s not likely to change things if your friend is unwilling to pay off their debt.

The mediation process involves having a third party help talk it out, present new ideas, and get both parties to agree. On the other hand, the small claims court leaves it up to the judge to determine what to do.

If you have to file a complaint in small claims court, come prepared to show the court evidence of the money owed and your attempts to collect payment. Evidence may include bank statements showing the original loan amount, text messages about repayment, and any record of partial payments made by your friend.

The judge will also listen to your friend’s side of the story to get the full picture. After that, they’ll look over all the evidence, reflect on the given testimonies, and use their legal expertise to decide how to best handle the case.

If you win your case in small claims court, the judge will order your friend to pay you immediately. Although that might mean you’ll lose your friend, their unwillingness to pay back what they owe shows they weren’t a great friend anyway.

Get Dispute to file your small claims case online today. Win back the money you deserve.

Related articles

5 Small Claims Court Mythbusters

Whether you loaned a family or friend money, paid for unsatisfactory service, or had another party violate a written contract, you may feel the need to seek reparations by suing. But concerns over the cost of retaining a lawyer and the time you will need to dedicate to the matter cause many people to let the other...

· 5 min read