I loaned some money to a person that I shouldn't have...now what?
January 7, 2013 10:12 AM   Subscribe

I realize that YANML but I find myself in a dilemma and I'm not sure how to proceed.

I recently started a F&B business and hired a staff of 10+ people. I offered the position of lead bartender to someone with lots of experience and good references, noting that if things went well he would become a manager. Prior to opening, he told me that he was in a tough financial position during the off-season and between jobs and asked to borrow $300. I lent him the $300 and we both signed a piece of paper saying, "I, ---, acknowledge that I am borrowing $300 from --- on 11/12/12."

Things did not go well and I ended up firing him on his first shift. He had no interest in being there, had a bad attitude, didn't attend our most important training, was saying "not my job" within the first hour, etc. Anyways, it's been a few weeks since and he has not yet paid me back. He flip flops between texting me that he'll get it together soon and that he was promised a manager position and this is bullshit. I have both a signed piece of paper and text messages acknowledging the loan. He just messaged me that no time table has been set and he therefore has "a lot of time to take care of it" but I know he's working a job where he's making $300 in tips easily in two shifts. I asked him to get it to me before the end of the month.

How do you think I should proceed? Wait it out until the end of the month and see if he pays up? Demand the money earlier? And if he doesn't pay? I feel like a lawyer wouldn't be worth the sum of money, but it's a small town and I could definitely spread the word...

Thoughts? Thanks!
posted by masters2010 to Work & Money (13 answers total)
you lost $300, don't lend people money, unless you want small claims which will leave you ~$150 at best.
posted by 1inabillionmistake at 10:14 AM on January 7, 2013 [12 favorites]

Write it off. If you ever see the money again, it's free money. If not, lesson learned.

DO NOT spread this around town. If anyone asks you about this guy, just say, "He didn't work out" and change the subject.
posted by Etrigan at 10:16 AM on January 7, 2013 [3 favorites]

You paid $300 to learn a life lesson, don't lend people money that you can't afford to lose. Move on, not worth pursuing it as much as it sucks.
posted by lpcxa0 at 10:17 AM on January 7, 2013

Yeah... it's kind of in that difficult area, too small to really be worth litigating against, too large to forget easily.

I'd ask, once, point blank; "when are you going to repay this?" and then never deal with this person again. $300 is a chunk, but forever henceforth don't lend money to employees, don't lend money to friends (unless you are willing to lose it without hard feelings).

Sorry... cheaper then it could have been though.
posted by edgeways at 10:26 AM on January 7, 2013

Well, I would try to set a time frame now - how about 100/150 this week and the remaining money till the end of the month? If he comes up with part of the money at least you'll have that much. Better than nothing.
He sounds like he is in no hurry to pay you back but maybe he is not a bad person entirely and will acknowledge that you as well are going through tougher times and just wanted to help him out but can't wait that much longer for the money.
It's worth a try. I would not spread this story or involve lawyers though. Worst case is the money is gone.
posted by travelwithcats at 10:33 AM on January 7, 2013

Chalk it up to a not-that-expensive life lesson. When I learned this the hard way, it was $2500.
posted by something something at 10:35 AM on January 7, 2013 [1 favorite]

"When I learned this the hard way, it was $2500."

Cost me $1000. Plus the embarrassment of being listed as a debtor on his much later bankruptcy. Life is hard.
posted by Anitanola at 10:58 AM on January 7, 2013

the embarrassment of being listed as a debtor

If you loaned him the money, you would have been listed as a creditor (he would be the debtor). There shouldn't be much embarrassment over that.

travelwithcats is being plenty soft here. This wasn't someone you had a real history with, and you found out you should have said no. Somebody who asks for that much money upfront is probably incapable of shame and likely to do this to someone else soon enough. You won't see that money.

What you need to do now is practice saying no. Right now I'm on the wrong end of $3600 in rent that a relative kept pushing out to "next month". Should have acted sooner but there were family dynamics in play. I never intended to be in this position but it only happened through a roommate switch that I reluctantly acceded to: my mistake. I told them I was violating my "no family" rule and why, but I'm the one who ended up knowing that I consciously made this mistake with every awareness that it could end up being this messy and expensive. To add insult to injury, the relative reported me to the city for every minor repair she could think of. As I said, people of this ilk are shameless. Your two-hour employee is probably spreading your name all over town as a chiseler who screwed him out of a week's pay or some such. Sadly, there seems to be little middle ground on these things.

So be cynical, practice defensive driving, and assume that everybody asking for money might be out to screw you, even if they themselves don't think so at the time.
posted by dhartung at 11:21 AM on January 7, 2013 [3 favorites]

I think I may have said this before in a similar thread, but when someone asks to borrow money, I hand them half and tell them it is a gift. It saves you have the loss and there is a higher probability of getting paid back.

Assuming I am inclined to lend them money of course.
posted by JohnnyGunn at 11:35 AM on January 7, 2013 [3 favorites]

You could take him to small claims.

If you don't mind more humiliation, call up a judge show and tell them about your suit. If they opt to use you both on TV, you'll get an appearance fee, a trip to where they tape the show, and the show will pay you when you win.

Now you have a new policy. NEVER loan money to employees and especially NEVER loan money to prospective employees.

If you're ever asked again, you now have an answer, "I can't do it, I've been burned."
posted by Ruthless Bunny at 12:04 PM on January 7, 2013 [2 favorites]

What they said - write it off.

I've adopted a personal policy that if I have a friend that needs money for an emergency situation (for example, helping someone get the brakes in her truck fixed so I could be confident she and her kids would be safe), I consider it a gift. That way, if/when the person pays me back in the future, it's like hey, free money.
posted by mrbill at 12:34 PM on January 7, 2013

Does the note specify when the money is to be paid back? Most notes do. Without that he can say you gave him a year to pay it back, or whatever, and it would be your word against his. In small claims he could acknowledge the debt but say the time frame to pay it is open-ended. Personally, I wouldn't walk away, I'd stay after him to pay it. Know any out of work football players? Just kidding, you don't need to get yourself in trouble as well.
posted by PaulBGoode at 12:49 PM on January 7, 2013

I asked him to get it to me before the end of the month.
And what was his response?

If he's dumb enough to list you as a reference, you can talk about why you terminated him from employment, but the loan is a totally separate issue. It wouldn't make a difference to many people that he didn't pay YOU back, even without whatever spin he might put on it. It's likely not worth legal action but I'd probably at least threaten it, just because.

Did you pay him for the couple hours he worked?
posted by sm1tten at 4:52 PM on January 7, 2013

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