How to Collect a Debt From a Friend

Loaning money to a friend can create a hurdle in the relationship.

Loaning money to a friend opens the door to all kinds of personal problems. It may seem difficult to ask a friend to pay back what they owe you. In the same token, your friend may have trouble broaching the subject if they're unable to make a payment. Keep an open dialogue with any friends who owe you money. Agree that the financial arrangement has nothing to do with your friendship. Establish strict collection guidelines and stick to them.

Instructions

1. Ask your friend to repay you. Explain that he agreed to repay the loan. Ask when he'll be able to give you the money. Agree on terms acceptable to you.

2. Write a letter detailing the terms of the loan. Write a request for payment. Make a copy of the letter. Sign and date the letter. Send him the original letter via certified mail with a signature confirmation. Keep the copy.

3. Wait a week and call to inquire about how your friend wants to deal with the debt. Explain that you're going to seek legal aid if it isn't resolved. Tell them how long he has to repay or make arrangements for repayment before you take the matter to court.

4. Go in person to your local circuit court. Ask what kind of paperwork you need to file and at which courthouse you should file. Filing procedures and locations vary depending on your state and the amount of the loan.

5. Attend the court hearing. Offer to the judge any proof that the loan was made. Show proof that you've requested repayment and that your request wasn't heeded.

Tips & Warnings

• Always create a written agreement between you and your friend when loaning him money.

References

• Law Files: How to Collect Unpaid Debt from a Friend