What is the best way to collect on a debt owed by a friend?
July 6, 2011 10:11 AM   Subscribe

What is the best way to collect on a loan made to a friend?

Asking for a friend: AA loaned BB $200 about two years ago. AA had the money and BB was in a tough position, so AA made the loan without giving a set date by which it needed to be paid back--it was understood by both parties to be a "Just pay it back as soon as you're able to" situation. After about six months, BB made a payment of $50. About 8 months after that, BB made another payment of $100. Almost a year later, BB still owes AA $50 and it doesn't appear that it will be paid back at this point. AA realizes that $50 is a relatively small amount of money to quibble over, but it's still $50 and there's also the principle: BB has not made any attempts to change the lifestyle that put him in bad financial shape in the first place (active, highly social, lots of eating/drinking out), so it's not like BB is still so bad off that paying $50 is impossible (although it may be challenging to pay it all at once, due to BB's aforementioned lifestyle; however it could have been paid $10 here, $10 there over time so again, it's the principle of BB appearing not to care enough to bother working out a payment system). FWIW, AA and BB are somewhere between "acquaintances" and "friends", they are in the same general social circle and see each other semi-regularly so it's not like it was an out-of-sight, out-of-mind thing.

AA is feeling some anxiety over asking for the last $50 because it seems like a small amount (and really, who ever enjoys these sort of confrontations?), but hates the idea of his kindness being taken advantage of, either intentionally or unintentionally, by BB. So:

What do you think is the best, most tactful way for AA to collect on the remaining debt BB owes him? AA is also concerned that BB will pull a "I thought I already paid you back everything", which AA is fairly certain is not the case. AA is just expecting general awkwardness to ensue. How would you handle this? Is there some sort of unspoken, social statute of limitations dictating that becuase it's now been almost a year since the last payment and AA has let it go until now, that he should just cut his losses and get over it?
posted by lovableiago to Human Relations (19 answers total)
 
Is there some sort of unspoken, social statute of limitations dictating that becuase it's now been almost a year since the last payment and AA has let it go until now, that he should just cut his losses and get over it?

Yes.
posted by slmorri at 10:13 AM on July 6, 2011 [6 favorites]


Best answer: If AA really feels petty about asking for the money straight out, maybe he can wait until the next time BB suggests that they go out. Before AA accepts, he can say, "That sounds great... you can just pick up my [under $50] share, and we'll call that loan from last year even."

This might be considered tacky too, but being the "Hey, remember that $50 you still owe me from a year ago?" type of guy, it seems slightly more polite.
posted by Rykey at 10:18 AM on July 6, 2011 [2 favorites]


Best answer: Yes. Never loan any money to a friend that you cannot afford to write off. I'd consider a 75% recoup to be good going.
posted by DarlingBri at 10:18 AM on July 6, 2011 [22 favorites]


No, there is no way to get it back. That's why the often used phrase 'there are no loans between friends, just gifts' is often used-it's TRUE. Tell AA that everybody-myself included- has had to learn that lesson and $50 is a cheap lesson at that. Loaning BB any $ will not help him at all-only prolong him being able to live that lifestyle.

(BTW I co-signed a friends car note so they could get a job. Guess how *that* ended?)

It sucks. The real life lessons always do
posted by Frosted Cactus at 10:19 AM on July 6, 2011


there's also the principle: BB has not made any attempts to change the lifestyle that put him in bad financial shape in the first place

that's a good reason to never loan money to BB again, but it has nothing at all to do with the first loan. if the money was important, AA wouldn't have let it go one for 2 years.
posted by nadawi at 10:23 AM on July 6, 2011


Geez, if I had all the money I've loaned friends, it would be several thousand dollars. Honestly, I'm surprised that you got most of it back from a guy who likes to party. Maybe he's even forgotten the last $50. Purely because he did seem to want to pay it back, you might try the "pick up my tab at the bar" thing suggested by Rykey.
posted by Frowner at 10:25 AM on July 6, 2011 [2 favorites]


There's nothing at all rude or tactless about asking for the money back, and it doesn't have to be awkward if AA makes it awkward. Ways AA can make it awkward include feeling embarrassed about asking, beating around the bush, bringing BB's lifestyle into things, etc.

AA should treat this as the most normal thing in the world and like it's an "of course."

What do you think is the best, most tactful way for AA to collect on the remaining debt BB owes him?


I'd send him an email FIRST thanking him for paying back all the money he's paid back so far, and expressing good feelings about that. Then I'd say I have a few expenses coming up at various times in the future and just need an idea of when the rest is coming.

My advice would be different if this were like a total scammer/sociopath but he doesn't sound like that, just not super responsible.

If he said he already repaid all the money, I think that's a problem to deal with when it gets there; it doesn't sound super likely to happen to me, because again, BB hasn't so far displayed dishonest behavior, just irresponsible behavior.
posted by Ashley801 at 10:28 AM on July 6, 2011 [4 favorites]


AA should re-frame how he feels about that money, and then he won't care every time he sees BB!

AA should consider that $50 a donation towards future good karma. And yeah, never loan anything you are not prepared to lose.

BB's lifestyle is NONE of AA's business! $200 doesn't buy him a vested interest in BB's affairs and it's weird for AA to be thinking that way.
posted by jbenben at 10:29 AM on July 6, 2011 [13 favorites]


If you can't afford to lose it, you can't afford to lend it. It sucks, but that how it works sometimes.

AA should perhaps remind BB about the loan or ask for the money back, but AA shouldn't expect it back. Consider it a lesson learned.
posted by Solomon at 10:29 AM on July 6, 2011


BB might ask for another loan someday. Then AA can say "But you still owe me $50 from the last time," and refuse to do it again. I wouldn't do anything beyond that.
posted by Net Prophet at 10:39 AM on July 6, 2011


"AA is also concerned that BB will pull a "I thought I already paid you back everything", which AA is fairly certain is not the case."

Only "fairly certain?" Should he not be 100% sure before broaching this subject?
posted by GeniPalm at 10:40 AM on July 6, 2011 [4 favorites]


Best answer: When I can, I'll loan money to friends and acquaintances if they ask for it. I'll do this once, without question, per friend. I will only loan money that I could (just about) afford to write off, and I'll do it half-expecting to have to write it off. If they pay it all back without me having to hassle them at all, I'm happy to give them more money when I can in the future. If I don't get any or all of the money back, that's cool, but they're off the list - no money, no matter what, will go from me to them in the future.

Sometimes I need to borrow money from people. I always make it clear, when I do, exactly when they'll have it back, and I make sure to give them it back at that time, without them needing to ask for it. That's what adults do.

$50 is a small amount and you're going to have to have to write it off, and never lend this person money again. It's a bummer to be ripped off even in this small way, but here's how you make yourself feel better about it: $50 doesn't mean much to you, but it means enough to this guy that he's prepared to shame himself over it. That's quite a predicament. And if he's done it to you, he's done it to others, and eventually everyone's gonna be wise to him. The way he deals with his finances is not your problem, it's his. And it's gonna become more of a problem the longer it goes on. That's karma in action, and in the long run you'll find yourself much more than $50 ahead of him.
posted by cincinnatus c at 10:42 AM on July 6, 2011 [10 favorites]


What do you think is the best, most tactful way for AA to collect on the remaining debt BB owes him? AA is also concerned that BB will pull a "I thought I already paid you back everything", which AA is fairly certain is not the case. AA is just expecting general awkwardness to ensue.

Ummm, this reads like AA has not even mentioned the last 50 bucks. I agree that he should be prepared to write off the money, but saying something non-confrontational like "Hey bud, don't you still owe me $50 from that loan I gave you awhile ago?" is an easy thing to do.

I'd be willing to bet that BB knows he still owes the money, but figures AA has just cold forgotten about so is letting it go.
posted by auto-correct at 11:01 AM on July 6, 2011 [3 favorites]


Loaning someone money does not endow the lender with authority to then become judgmental about whether the person's habits "that got him into bad financial shape in the first place" have changed or not. Ask for the money if it's that important, but don't cross that line.
posted by so_gracefully at 11:30 AM on July 6, 2011


$50 isn't that much, between friends. +1 to the above suggestions about suggesting BB pick up the tab the next time AA & BB go for a drink or a bite. It's more equitable and lets BB save some dignity. In the future, for small amounts, AA should just gift money to people who are gracious enough to pay it back (in one way or another) without asking.
posted by Hylas at 12:17 PM on July 6, 2011


Either ask him or do the drink suggestion mentioned above. Then let it go. If he is flaky/irresponsible, then he may have actually forgotten about it. To bring it up and remind him might be much better than to have judgment harbored against him. It would suck for the friendship if this was all due to an oversight that can be easily fixed.
posted by Vaike at 1:39 PM on July 6, 2011 [1 favorite]


I never lend money to friends. I give it to them if they're desperate, but I don't lend it.

If I lent it there would be bad feelings because I wasn't getting it back, I wouldn't be able to help noticing that they are as crap with money as I am even though it's none of my business, and on and on.
posted by tel3path at 2:50 PM on July 6, 2011


There is no such thing as a debt between friends. Give it as if you'll never get it back, and let this go.
posted by platosadvocate at 2:59 PM on July 6, 2011


I really don't see what's so tough about a "hey don't you still owe me $50." Or why that would be a friendship-destroying thing, if not turned into a big huge deal.

As I read this, he never once asked for repayment of the final $50. Maybe the borrower forgot. Maybe he can't afford it. Maybe he doesn't want to pay it back. Who knows? And yeah, the wisdom about not loaning money to friends and expecting to be paid back is great and all, but that doesn't make it wrong or awkward or whatever to ask for it.

If this is causing the lender too much anxiety just by thinking about it, then he should just mentally write it off and not ask for that reason -- peace of mind is worth $50. But I really don't see how it's a big deal to just ask.
posted by J. Wilson at 5:12 PM on July 6, 2011 [2 favorites]


« Older From the Hills to the Trees   |   Be prepared. Newer »
This thread is closed to new comments.