by
Like you, I don’t like it very much when someone I thought I could TRUST does not pay me back the money I loaned out, but it happens.
So what do you do when someone you gave a loan to does not pay you back?
Hopefully, you and the borrower signed an agreement that details the terms of the loan, if you did, then the written loan agreement may simplify the collection process.
If you DID NOT, (shame on you) then you are going to have to resort to appealing to the borrower’s sense of dignity and honor.
Begin by approaching the borrower in a private setting and offer a friendly reminder of the verbal agreement the both of you made in regards to the personal loan.
Be polite but firm and state how long the loan has gone past due and how it would be good if the loan would be paid back NOW because you need the money.
Again, be polite, but state your claim with clarity and stay firm.
If the borrower cannot pay NOW, then be direct, and ask for a specific date for when the loan will be repaid.
If the date of repayment is satisfactory to you, then be ready with a prepared written repayment agreement that both of you will sign and indicate the terms of repayment and note the specific repayment date on the written agreement.
If the repayment will require more than one payment, then make sure to indicate the repayment schedule on the agreement.
Include the borrowers name and address, city and state and zip code on the agreement.
*** This is your opportunity to make the loan official, don’t let this opportunity slip away.
If financial terms for repayment cannot be established at that moment, then consider for your friend to ‘work-off-the-loan’, or at least a portion of the loan.
If you know that your friend possesses a good professional skill, then, if you need such a service, ask if they are willing to offer their services in exchange for a partial reduction of the loan.
Make it ever so clear as to the total dollar amount that will be applied towards the loan, in exchange for the service your friend will provide you, and put this dollar amount in writing, and make certain both of you sign the agreement.
If they do not possess any particular skill, then ask them to rake your yard, mow your lawn, clean your garage or help you move a piece of furniture.
Both of you must agree in writing as to the amount that the loan will be reduced by, in exchange for this particular service.
If you are so inclined, and have a family member or another friend that needs such services, then consider having your borrower offer their services to them for a partial loan reduction.
AGAIN, NO MORE VERBAL AGREEMENTS HERE, IT MUST BE IN WRITING.
Finally, if your ‘friend’ still refuses to pay you back the money they owe you or if they refuse to offer their services in exchange for a partial reduction of the loan, then it’s time to put this person to shame.
Start spreading the word about this persons dishonesty and embarrass them by telling other mutual friends and associates that this person is someone who is not to be trusted.
Ask mutual friends and associates if there is anything they can do to encourage this person to pay you back what they owe you.
No need to be mean or vitriolic, just be clear and honest in your testimony.
This will result in their personal image and personal reputation to most certainly be soiled and tarnished.
Understand that most people want to be well-thought-of and this particular action usually brings any person of value to their senses and hopefully move them towards making things right with you.
Goodwill Credit can help turn your bad credit into good credit and make your good credit even better. SUBSCRIBE NOW.
