What to Do When a Loved One Owes You Money
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Last Updated on by Noni May
It starts off innocently enough – a family member or friend is in a tight spot and they need some money. Maybe they need to pay off some debt, or maybe they have medical bills that need to be addressed right now. Maybe it’s even something as simple as giving them a loan for school.
No matter the reason, loaning someone you care about money usually isn’t an issue. But, when it comes time to get that money back, things can quickly go south if you approach it the wrong way. It’s far too easy for people to become defensive, and you don’t want to risk ruining a relationship with someone you love because of dollars and cents.
So, whether you need to make more money and you need your loan back to get started, or you just want to recoup what you originally gave, how can you make sure you get your money back without destroying a relationship?
Don’t Be Afraid to Be Firm
According to a survey by American Consumer Credit Counseling, 15% of people said they wouldn’t expect to get their money back if they loaned it to a friend or relative. But, that isn’t always the case.
One of the best things you can do is to be firm from the start before you even lend out your money. Make sure whoever you’re loaning it to knows that you do expect to be paid back. Making it clear whether the money you’re giving is a loan or a gift will help to dispel any confusion before it starts, so you don’t have to have an awkward and unexpected conversation with that person later.
Make it Easy for Them
You might be tempted to just tell whoever is getting your money to pay you back whenever they can. That’s usually not a good idea. Some people are very good about paying back loans in a timely manner, while others can quickly forget about their obligations to pay you back.
So, make it easy for them. Sometimes, people avoid paying back personal loans because they can’t afford to give it all back at once. You can set up a payment plan/schedule for them that allows them to make smaller payments to you each month. Not only does this hold them accountable, but it ensures that you’ll eventually get all of your money back. It might be a bit more tedious, but it’s still a way to help out your loved one and get your loan returned.
Use a Third Party
Calling in professionals over $50 might be a little extreme. But, if you loaned someone close to you a substantial amount of money and they’re not paying you back, you may need to contact a collection agency. Using a third party helps to remove you from the situation and makes it more impersonal, so even though you’re asking for repayment, you’re not criticizing your friend or family member.
Asking for your money back after giving someone a loan is never easy, but taking steps ahead of time to get your loan returned can save you from destroying a relationship over it.
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