THE reality of life is that when we loan people money, especially our family and friends, they break their promises when it’s time to pay back the money or they don’t pay at all. Many people often feel bad about asking for their money back when it’s not paid as promised for fear of ruining relationships. We give you tips on how to deal with the situation.
SPEAKING TO THE DEBTOR
Enquire politely about the money to make the debtor aware that they haven’t been paid you. Sometimes people forget and all they need is a friendly reminder. “A constant reminder to the person who owes you money is a good starting point for you to get your money back as this will give you a clear indication of whether the debtor intends to pay you or not. Remind the person how much they borrowed, why they borrowed it and when they borrowed it,” says Capetic Bank Client Service Consultant Bongani Lebambo. “By doing so, you are being civil and showing humanity to the person you have borrowed the money.”
HAVE EVERYTHING ON RECORD
Bongani advises people to always keep a record when asking for their money back – from SMSes, WhatsApp conversations, telephone recordings, payment agreements, email conversations and letters of demands. “This is very important because people are not always trustworthy. This will also help you when you decide to take the legal route. When you have been patient and the debtor starts telling you stories and they are no longer interested in paying your money back, then it’s time to make a demand. “At this point, you should tell the person to come up with a payment plan to pay you on a monthly basis. Should there be no payment or communication from the debtor, then you can take the legal route. Sometimes we are forced to take our friends and family members to court, not because we want to, but because they take advantage of the kind of relationship we have with them,” says Bongani.
TAKING THE LEGAL ROUTE
Bongani says that taking the legal route is the last resort when the debtor clearly has no intention to pay you. ”File a lawsuit in the Small Claims Court and make sure that you have all the evidence against the debtor,”says Bongani. He adds that you must however make sure that the amount owed is worth fighting for in court. He says that if you feel that going to court is going to be too much of a hassle, you can request a collection agency to collect the money on your behalf. This will let the debtor know that you are serious about getting your money back. This will save you the effort of contacting the debtor yourself and arranging for the payment of the money. Bongani warns that collection agencies will charge you a fee and they can charge you up to 50% of the payment for their services, so you need to decide if the partial payment is better than nothing.
A WORD OF ADVICE
Bongani says when you borrow money to family and friends, make sure that they sign an agreement stating the amount of money they have borrowed and the date they are going to pay it back. ”I advise you to transfer the money electronically so that you have evidence should the person refuse to pay you back,” he says.