what advice would you give to recover a bad debt?

Question

i loaned a sum of money (5 figures) to a friend 3 years ago and despite him signing a letter agreeing to pay me back monthly (this was last October!) i have not received a penny despite numerous emails, telephone calls and personal conversations.. it has been suggested by another friend that i 'sell' the debt to a debt recovery agency... is this a good idea? i would be grateful for any suggestions

Answer 1

Oooeeww, debt recovery agencies could make your friendship dissolve almost immediately. They are known to be pretty hard core at times and they can really pi*ss people off.

If you choose debt recovery, your friendship may very well be ended and it could cause animosity. Think about what you have right now and determine if it is actually worth losing a friendship over.

Perhaps saying "I really don't want to throw this to a collections agency or anything, can we work something out so that you can Honor this loan?" If the friend is struggling, see if offering a set sum a month that is a little lower than the initial agreed upon one, solves the problem. If you loaned him money before he may be in that position again seeking some kind of reprieve from something. Perhaps he already has collection people bugging him. Never know.

I'd try to work it out without someone elses handy work getting involved...if you find out the reason for non pay, you can probably work on a solution that works for both of you and still have the friendship intact. Of course if you've tried being Mr nice guy and it has bombed, then you may have no recourse except the collection route...tell him your intentions first tho, sometimes it is interesting how they get together the necessary funds when they believe their credit rating could be harmed.

Next time, you can then adhere to the "don't a lender or borrower be", well at least the first part, and as well they say lending to a friend sometimes ends the friendship....hopefully yours remains intact.

Answer 2

You can either sell the debt, usually for pennies on the dollar, or you can sue.

If you have a signed letter stating that you were to be paid back and he hasn't kept up his end of the bargain there is no way that he can say he didn't know that this was a loan.

The only problem with this is if you do get a judgment against him you'll still have to collect the monies. It doesn't automatically mean that you'll get the money back. You may have to take it past the initial suing and try for a wage garnishment.

Answer 3

I have just been through this myself.

1 Get a judgement - you can do this on line in UK via money claim on line
2 when you have judgement you can then enforce it with a bailiff, or third party debt order (freezing their bank account) , or a charge on their house (which only works if they want to sell it) I tried the last two and he still didn't pay up. Selling the debt may work but you will loose a big slice of the debt.

It all depends on how much you now about the person, you need to work out is it "cant pay" or "wont pay" if its the former then your strategy is limited to the charge on property

Answer 4

well that depends on if you plan on keeping this person as a friend. the debt recovery agency is gonna buy the debt from you for a price substanually lower then what you gave. and for 50 dollars you can just file a suit in common pleas court at least thats the price where i live. but i have to ask did you get the note he signed notorized if not then it might not be legal binding in your state. if you decide to go to court then dont hire a lawyer as long as you have the telephone records showing where you called, the emails you sent to this person and any and all responses this person sent back to you. you could always record the any conversations but know this the supreme court decided years ago that recordings can not be used in a court of law for civial matters unless all parties involved know they are being recored and give their consent. just besure to present all the evidence you have to present your case.

Answer 5

if you have a reciept you can take the matter to the small claims court, this will cost approx £100 to present, following the ruling there will be either a repayment plan set up of an order to pay the lot.

You could sell the debt to a "company" this may cost a little more, up to £500.

Either way you are looking at an old friendship!

Answer 6

This continually varies with the employer and the quantity. some will write off a small debt after purely some months of unsuccessful series pastime, by using costs of fix being more effective than the debt. large sums are purely ever written off even as the creditor believes that any volume collected will be less than the fee of series. agencies will oftentimes seek for redress through the courts yet might want to conform to settle for, by using volountary association, a decrease ensure to be paid by using month-to-month funds (an IVA)

Answer 7

No, don't sell your debt to a debt recovery agency. They aren't particularly trust worthy in my mind. Instead, see legal advice and consider taking your "friend" to court. The promissory note is your golden ticket.

Please don't go loaning out money to your friends in the future. Harsh, I know...but stuff like this is bound to happen again.

Answer 8

Your friend knows he has to pay the money back, and you've already been reasonable and patient about it. If he's not going to do the decent thing, then its up to you to decide what to do next.
It's not about whether you value the friendship; he's already shown he doesn't. You could try the small claims court, they've changed the amounts they can deal with, there are now two levels of claim.
This link might give you some advice.

Answer 9

Learn the lesson I have learnt and never have business dealings with friends. It is the one certain way to lose them.

Give your friend a written, one week's, final notice to contact you for final discussion, or you will go to a lawyer.

Failing that, go to a lawyer and take his advice. Make sure you claim for the debt, plus reasonable interest, plus your legal expenses.

Go to a dept collection agency as a last resort, because of the cost.

Answer 10

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