Paying to learn a tough lesson
September 24, 2010 2:24 PM Subscribe
How do I go about proving an uncollectible debt?
posted by rileyray3000 to Work & Money (6 answers total)
About August of last year I got a call from a woman who, up until recently, was my mentor. She said she'd been the victim of identity theft and she was in the process of moving and had no money for the deposit on the new apartment or to pay the movers. Now this is a woman who helped get me into college, who's always been eminently trustworthy and who I respected a lot.
I was, at that point, getting paid in cash for my job. And I was putting 1/4 of each check away to pay the taxes later. I told her I could take the money out of there but it would HAVE to be back by tax time. She said the bank was looking into the way the identity thieves got her money and she thought it would be replaced soon. So I loaned her 3200 dollars
Over the next few months I would call to check on her as a friend and also to get an update. I would offer to call the bank and look into it. I would offer to get experts to look into it. I was always rebuffed. Eventually what I did find out through her is that she had been compromised before. By people in croatia and poland. To the tune of tens of thousands of dollars. And possibly a couple of times. And now the bank thought she was in on it.
Do I think she was? No. She's a woman in her 60's. I think it's unlikely for her to get involved with this sort of thing. Do I think she's lying? Not necessarily. She uses her debit card online and on an old PC that probably has no antivirus software to speak of. She's older and she's proud and she's probably made some major mistakes here.
But one of the big ones was how she handled it with me. She dodged me and told me she'd loaned out thousands to people and never gotten it back. And as tax day drew near her plan was to borrow it from another friend of hers who was rich.
It didn't happen.
I had to borrow money from my boss to cover the money I loaned her and spent a good deal of time paying him off this year. It left me in a hole I just got out of.
She is a friend and, up till now, I could never imagine her doing this. In the interest of that friendship I asked if she could even pay some token monthly amount to pay me back. She agreed and then I didn't hear from her. When I finally did, she said she was now living with friends and I would someday get my money from her. But to stop pestering her about it.
When I brought it up to a friend - because I was just angry and talking - he said I could claim it as an uncollectible debt on my taxes and just be done with the whole thing. I asked my tax guy about it and he said I would need to prove I tried to collect on it. But if I did I could take a deduction for the amount
What's the bare minimum I would need to do in order to do this? I don't want to harass this woman but if it could be done simply with some notarized letters and such then I think I could put the whole thing behind me. Maybe someday I might be able to think about this woman without getting immediately angry.