Debt Collection?

Question

I fell for a sob story and loaned my sister-in-law's daughter money. She has yet to make a repayment. I need suggestions on how to nicely, yet firmly, discuss and negotiate a re-payment schedule of some sorts?

No lectures please. I realize I was a total fool.

Answer 1

How you can go about collecting the money depends on the amount, and what the terms (if any), and the laws in your state.

First off, this is a civil matter, so calling the cops won't do you any good. Different states have different laws, so the first thing I would do would be to look into those laws.

Now, did you make any sort of written contract or agrement? If so, getting the money back will be pretty easy. If not it could be a bit harder, though not impossible. If you did not get anything in writing, did you at least give her the money by check? If so you have proof of the transaction. Personally, I would just take her to small claims court. The only problem with that, you can't legally force somebody to pay even if you win. I know this because my mom once sued somebody in small claims court, and won, but the guy never paid. Luckily she had a friend who was a lawyer, and he did some legal "magic" and got her the money.

If you would like to avoid the legal route, at least for now, you could look into getting a third party mediator. This is the best way for you both to sit down, discuss whats going on, and have somebody there that is neutral to help keep things civil, and fair for both of you.

If you do want to take her to court, you need to gather as much evidence as you can. Again, I don't know what state your in, but I do know certain states consider verbal contracts to be as binding as written ones. If you wrote her a check, contact your bank for a copy of the check. And if any other family members or close friends were around at the time you made the agreement, talk to them. Chances are if you even start to talk about taking her to court, she will get scared, and pay up.

If you can settle this, and she makes payments, have her pay you by check, or casheiers check, that way you have evidence that she did in fact make an effort to pay (which will prove to the courts that she admits she owes you money) and write out receipts. That way if she stops paying you, you have proof that she has made an effort.

Now I know you said no lectures, so I am not going to lecture you. However I will offer some advice. If you do decide to loan somebody money, whether they are a friend, family member, or whoever, make a contract, have witneses, and do it by check or money order. That way if this happens again, you have proof, and can get your money back. :)

Good luck :)


Oh yeah, one more thing. Only contact her in writing, and have her do the same. That way if you do have to take her to court, you will have written proof of your attempts, and her responses. Most ppl are stupid, and wil admit they owe you money, they'll just make up excuses.

Answer 2

Sounds like you aren't looking for all the ways you can "force" her to pay, but are looking for a place to start. You need to sit down with her and let her know that not paying you back is NOT an option. Then determine what her income and outgo are. I am assuming she is working...Once you have a picture of what her abilities to repay you are then you can discuss what she needs to pay. When discussing outgo, I would try to reel in any frivilous expenses (like those $100 fake nails). Once you have agreed to the how much and when, make it "official" by putting it in writing (doesn't even have to be typed). Have her sign it and then make sure you follow up very closely to get the first few payments. Once she has adjusted her spending habits to include the payment to you and understands you are serious about her repaying it, you shouldn't have too much trouble keeping her on track. If you want to really stay on top of her, send her a "payment reminder" about a week before her payment is due letting her know how much she has left. If you handle it this way, you may give her something much more important than the money you loaned her.

Answer 3

Anyone who takes a loan is liable to forget about it altogether, to recall the conditions (sum, repayment date, etc.) inaccurately, or to imagine other lenient considerations. Since this is part of human nature, it is incumbent on the lender to make the terms clear so as not to inadvertently encourage this kind of irresponsibility on the part of the borrower. If you really just wanted to help out a needy family member and the vehicle of a loan was merely a way of making the recipient feel better and give you a chance to get the money back of your relative had a stretch of good luck, by all means its ok to lend the money and let your relative know "Pay me back whenever you can." If you didn't specify an exact time for repayment the borrower will never be technically in default and you've created a situation where your relative is not acting dishonestly.

Let her know that you gave the loan with the assurance that as the borrower, she took seriously the need to get on her feet financially and that you really need the money back. You should make clear to her that this was a serious loan, and that although every aspect of the loan transaction was not documented, i.e. a Promissory Note or a written Agreement, emphasize that she is in default and that unless you receive payment that you plan to take normal collection action on the loan. There is no shame in making this threat and no shame in actually making the same collection actions as you would in any normal loan. You lent the money and you are entitled to get it back. Let her know and make sure she understands that you have the ability and the intention to enforce your rights. In this way, both you and the borrower will benefit and relations between you will be strengthened and not strained.

Bottom line is to approach her and determine her total debt, her ability to make payments and set up a payment schedule. Its most likely that she is the one who is uncomfortable in this situation and needs help. However, by allowing her to forego repayment will foster future financial irresponsibility and lack of money management skills. Its your responsibility to set up a legitimate pay schedule, in writing, and if she skips or defaults, then either seek help from a third party collection agency to act as a mediator, or pursue legal remedies by filing a small claims or civil complaint (depending on the amount she owes).

Answer 4

Just sit her down and tell her she has to start repayment or your taking her to small claims court.
If she doesnt pay - take her to court.

Answer 5

Tell your brother or your spouse, which ever applies. Let her work it off, with the dirtist jobs you can think of. then give her the option to pay you back with her tax return.

Answer 6

Move on down the road and chalk it up to experience. She knows she owes it. But, it is probably history. If it is any comfort (and it probably isn't) your silence will be deafening.

Answer 7

if you're in debt, i suggest you take a look at this site. just fill out the form and take it from there.

Answer 8

I would just ask for the money and if they said they don't have it I would ask how much do you have??? And just ask and ask til I got it....