How to Collect Personal Debt from a Friend, Family Member, or a Business

Many of us think of debt collection as something that only businesses and contractors have to deal with. But of course, this simply isn’t the case. Sometimes, individuals make loans, be they to businesses or other people, and have trouble securing repayment. There are legal remedies you can use to collect of debts you’re owed, but small claims court, debt collectors, and advocates fees can often times be avoided if you’re smart and proactive. Here are five tips to protect yourself against non-payment. 1. Use a Promissory Note We can’t stress this enough: if you’re going to loan a business or other individual any substantial sum of money, put it in writing. Understandably, asking a friend or loved one to enter into a contract can feel impolite, but if you’re worried that you may not get paid and that you’ll miss the amount of money you’ve loaned in the first place, it’s essential. A PromissoryNote simply lays out the sum of money loaned and the conditions of repayment. You can set these as you see fit. Perhaps you’d like to acrue interest on loan or demand it repaid within a month or a year. These options are certainly available to you. Promissory notes are fairly simply contract but they are binding documents. Securing repayment without one is always much more difficult. 2. Be Polite Even though the debtor has broken their word, collecting on a debt tends to go more smoothly if you’re polite. Contact the debtor and ask if they remember the debt and when they plan to pay. Sometimes, they may have just forgotten. But no matter what, being combative is the surest way to stall the process. Debtors can get combative and react to your negativity. Especially on your first contact, approach them with respect and politeness. 3. Put Your Requests for Payment in Writing If your first entreaties are ignored, it’s time to send letters. 30, 60, and 90 Day Past Due Notices can be used for this purpose. They’ll create a paper trial and show your debtor that you’re serious about getting repaid. Keep copies of these letters in case you end up in small claims court down the line. 4. Think about a Debt Settlement Agreement If your debtor has fallen on hard times or if you’re worried about recouping your loan or if the amount you loaned is simply not worth the hassle, think about using a Debt Settlement Agreement. With this, you can amend the original agreement, changing the amount owed or the time frame in which the debtor must pay you. Sometimes, avoiding protracted court room battles or the worry about losing a friend over a debt can spur people to using these agreements. You’ll have to consider whether it’s right for your particular case, but it’s good to know that the option is available. 5. Call in the Big Guns Hopefully, it never comes to this. But if your personal attempts to collect your debt go ignored or otherwise fail, it’s time to call a lawyer. If you were a business, a collections agency might be your best option. But, generally, in personal matters, it’s smarter to enlist the help of an attorney first. Have the Lawyer write a letter to the debtor. The appearance of a demand letter on legal stationary can show your debtor you’re serious about getting what you’re owed. If your debtor still won’t pay up? Then you may want to consider money through court process. Of course, once you have a seasoned lawyer on your side, it’s a good idea to ask his or her advice as to how to proceed. After all, every loan, every debt, and every situation is different. A good lawyer can advise you how best to navigate your unique situation. Article by Advocate K.P.Satish Kumar M.L., Best Civil Lawyer in Chennai. For queries about your Money Claim call Daniel & Daniel @ 9962999008 Lawyer for Credit Card, Lawyer for Personal Loan, Lawyer for Mortgage Loan, Lawyer for Student Loan, Lawyer for bank Loan, Debt recovery Tribunal Lawyer, Lawyer for DRT, Lawyer for securitization, Lawyer for Loan issues, Lawyer for recovery of Money