In Jan. I loaned a friend $5k to pay back rent. She signed agreement for the loan to pay back $500 / month. So far I have $500 total from her.
First I heard that she was going to get money from a friend to help pay me back. Then I heard that was not going to happen.
Now I hear she is supposed to get money from a car wreck last summer. But that seems to keep getting delayed.
I have a feeling both of those stories are not true. I have a feeling I may never get this money back. Any ideas?
You loaned money to a friend. You should only do that with the expectation that you’ll never see it again, and treat it as a happy surprise if you do. The sooner you can get yourself into that mindframe, the better. From what you’ve said, my money (heh) is on you not seeing it again, or if you do, it’ll be years in the future.
I guess I mistakenly thought people would honor an agreement to pay back money no matter who they are . Also making up stories is probably the worst part about this.
Seriously? And collection agencies exist because …? Foreclosures exist because …? Small claims exist because …? Lawsuits exist because …? Because everyone always pays back the money they owe???
Be real and quit sniveling. Don’t let someone fuck around with your money. You helped her when she needed it, now she’s fucking you over. Take care of your $$$ and don’t be apologetic about it.
The good news is that, according to you, she signed a loan agreement so you have proof.
Do you have a smart phone with a card reader? If you have a PayPal account or are an Ebay merchant, it’s really easy to get one. I think mine cost $10. You can whip it out next time you see her and say “Hey Kathy, let’s take care of those three missed payments right now!” and swipe her debit card. If she doesn’t have enough for all the payments, get what she does have and make it clear that you aren’t screwing around.
When you determined she was credit worth enough for the loan, where was the $500 per month income for the payments coming from? Her job? File in small claims or civil court if 5K is over your local limit, get a judgment and do a wage execution.
If she really does have lots of money absolutely positively coming in from an accident, she won’t have any problem getting a 5K cash advance on the proceeds to pay you back. You can easily Google a company that does this.
Or you could just pretend you paid $4,500 to not ever have to deal with her again…
Not too many people I’d pay that kind of money for.
the only way people should loan money to friends and relatives is have it be in writing and notarized with collateral and the means to take legal action; just like the bank.
if you don’t you may have to accept the loss.
depends on the quality of your friend. you may get it back eventually.
most people have lent to friends and relatives on just a say-so. sometimes you don’t get it back (at least soon).
With a signed agreement, you likely have a winnable case in small claims. I don’t know if wage garnishment is available once a claim like yours is won, but it could be worth looking into.
Or take what payments she can make as they come and be OK with it taking a long time to get it back. Re-negotiate the payments to $100 a month or something like that.
My first question when reading the OP was how you could expect $500 a month from someone who was already skipping rent to the tune of $5,000. How could someone who had to be bailed out like that possibly continue paying rent and an extra $500/mo loan? I certainly wouldn’t be able to do that.
I lent $5k to a friend, have a signed contract. I told him I would happily sell the note to a collection agency. He missed a few payments, but generally it’s worked out OK.
‘Don’t lend money to a friend, you will lose both.’
The fastest way to lose a friend is to loan them money. Make up your mind, do you want the friend more or the money? Act accordingly.
She may be thinking, “Anyone rich enough to loan me $5K is rich enough not to care if I never pay it back.”
Your story illustrates why making friends with people who have the same level of financial security as you makes a whole lotta sense. I would never want to be in your shoes. But I wouldn’t want to be in your “friend’s” shoes either. Unless she’s a scam artist, she knows she owes you money and she feels awful about it. She’s probably lying because the truth–that you have absolutely no hope of getting your money back in the near future–is way too embarrassing for her to admit. (If she were a scam artist, I doubt you’d still be able to reach her).
As stupid as those daytime judge shows are, one thing I’ve learned from watching them is that you need to get shit like this in writing. And also, don’t loan money to friends. Ever.
[Quote=Shakespeare]
Neither a borrower nor a lender be
[/quote]
As others have suggested, I’d consider the money to be lost. I am in a different country, but I suspect it would be pointless both up here and down there to go to small claims under those circumstances. Yes, theoretically you might get your money back, but enforcing the judgement would be difficult if your “friend” is that short of cash.
I’d just no longer consider the person a friend and if the person tried to get any more favours or reinstate the friendship I would keep repeatedly reminding them of the debt.
The money isn’t necessarily lost–if you’re willing to sacrifice the friendship and make life miserable for your her, you’ll probably be able to get it back. Besides, if she’s willing to take 5k and not repay it, she’s a bad friend and you have no obligation to make her happy. If it helps, don’t think of 5k, but visualize what you can do with it–a spare car, a new carpet, a Rolex watch–that’s what she took from you.
The same applies to family, except they won’t go away.
Don’t lend money to friends if you’re not willing to lose either the money or the friend, or both.
If you like her a lot, the money is toast. There is no polite and friendly way to force her to actually pay you back. Realize you now have someone you think of as a friend, who on her side, thinks of YOU as a moneybags and a chump, and adjust the friendship accordingly.
If you really need the money, the friendship is toast. You need to take her to small claims court, and probably garnish her wages or snatch her next few years of tax refund money, because I’m going out on a limb here to say she doesn’t have the $ physically to actually pay you back, and likely never will.
Sorry. Some life lessons are damn expensive.
What kind of interest rate are you charging your friend?
As someone else mentioned, $500 a month is a tough nut to pay for a fiscally responsible person. For someone who let herself get $5k behind on rent, it’s probably impossible. She doesn’t have it, so she pays you nothing. Tell her this has got to stop. She has to pay you something every month, even if it’s only $100 or $150. This way you’ll get some of your money back before she inevitably declares bankruptcy, secretly moves across the country, or stops returning your calls. Get something out of her, the sooner the better, because you won’t be on speaking terms with her long.
Even Shakespeare knew that (a) loan oft loses both itself and friend. It sucks, but it’s true. You can choose to make it a gift, that way you will feel better about not getting the balance - you’ll feel less taken or hurt. Unless you get a judgement, or sell the loan (for a likely steep discount) you are not likely to see the money again.
By loaning money to someone, you put yourself into a Catch-22: If you begin to piss them off by angrily demanding to have your money back - and especially if you inadvertently piss them off to the point of the friendship being essentially severed/broken - the more you may make them want to spite you by **not **returning the money.
I hate to say it, but you have put yourself in a situation where your friend holds most of the power. I’ve loaned big amounts of money to a friend before, too, who never paid me back.
You know, our current credit system is pretty bad ass. If someone can’t get a 5k loan through conventional means, there’s probably a good reason for that.