How to Collect on a Personal Loan

When you lend money to someone, you expect them to pay you back; you wouldn't lend the money if that weren't the case. Collecting on a personal loan from someone who isn't paying you back can be a difficult endeavor.

Instructions

1. Determine when it stops being about friendship and starts being about business. Have a heart to heart talk with the person and remind him of his obligation. Tell him that you really need some kind of payment on the personal loan. Set an agreed-upon date when he will make a payment.

2. Talk with the person again the day after he was supposed to repay the money. Be polite and ask why he hasn't paid. At some point, however, you will need to stop being polite.

3. Write a promissory note, if you have not yet done so, and meet with the person to have him sign it. A promissory note is a brief one-or-two-sentence letter outlining that the person agrees to pay you X amount of dollars. The promissory note becomes a legal document when the person signs.

4. File a claim in small claims court against the person if he still fails to pay. Submit the promissory note, if you have one, along with any supporting documents that show the loan was granted and the person owes you money.

5. Garnish the person's wages after you win a judgment. File wage garnishments with the same court in which you earned your judgment.