February 29, 2020
What to Do When Your Friend does not Pay You Back
By : Ellie Brown
“I took out a loan of £1500 for one of my friends when he had some financial difficulties. His credit score was not so good, so most of the lenders would turn down his application. He promised to pay me back, but now he is refusing to do so. It has been a year, and he has not paid back even a single penny. Now debt collectors are chasing me. How can I get over it?”
If you genuinely believe a friend in need is a friend indeed, you will never hesitate to help your friend. Of course, when you saw him in a tight spot, you could not keep yourself from borrowing on his behalf, a sign of true friendship.
Financial infidelity is prevalent nowadays. You cannot mourn over what happened to you. Instead, it would be best if you find a solution. In your case, you have two concerns – getting the loan amount back and holding off debt collectors.
Even though there is no written contract that you and your friend signed in, it does not mean that you cannot recover the money, but it is going to be a bit tricky. Here is how you can deal with this situation.
Go to court
You have this option, but you need to consider whether it will be the right thing and it depends on the financial circumstances of your friends.
If he is still running out of money, does not have any savings or does not have any equity, going to the court will be throwing good money after bad.
Remember that if you want to take him to court, you will have to prove that you borrowed on his behalf and the amount you lent him was not a gift but a loan.
- You may show the bank statement to prove the transfer of funds to your friend,
- Text or email used to communicate excuses for non-payments,
- Any witness who confirms the purpose and details of the loan.
It is not necessary that you need to have a written contract between you and your friend. Such evidence may be enough to prove your side. Once you confirm it, the court will order him to pay back the loan.
Before you sue him, you will have to send a reminder of his obligation to repay the loan. Such letters may also play a part in the evidence.
Talk to debt collectors
If you have done it so far, you should immediately talk to debt collectors to explain your circumstances. It is essential to know if they stop imposing interest penalties to stop the amount increasing.
Try to convince them if they could write your debt off entirely. However, this will happen if you make them believe that you borrowed the loan on behalf of your friend, and he is badly off for settling the loan down.
If they are relenting, they will scrutinise your financial condition to see what they can do for you. Remember that the court can take some time to give the verdict. It would help if you made some satisfactory arrangements with debt collectors regarding the loan.
It is not an ideal situation, but debt collectors may not wait until the court actions. Even if it is proved that you borrowed money on behalf of your friend and now he is refusing to pay off, they would want money from you as soon as possible because you can get that money from your friend after the court’s decision.
It is useful if you have money to pay off all the dues outright. Otherwise, you can take out a loan without a guarantor. Of course, the chances of borrowing money at a lower interest rate may have dropped down, but Fortnitemoney can help you get these loans at competitive interest rates.
Getting money back from your unfaithful friend is not a cinch. It not only causes stress but also harms your credit score lowering down the chances of getting the best deals down the road. No matter how much you trust your friends, you should avoid borrowing money in your name to fulfil the need of your friends. Be careful next time.