Content

• Steps
• Advice
• Warning

Loans are easy, but sometimes it's hard to get them back. And at times like that, don't feel guilty about collecting debt: it's the other person who has broken your promise. Regardless of the cause of the loan, there is a way for you to handle it when someone owes money and refuses to pay it back. Sometimes, just a gentle reminder is enough. But being willing to increase aggressiveness in action will help you achieve your goal and reduce unnecessary distractions.

Steps

Part 1 of 3: Request for repayment

1. 

   Determine a time when you no longer trust the other person will automatically pay. If a specific due date is not mentioned in the original agreement, decide for yourself: what do you think the person will pay himself without a prompt?
   • Consider the value of your loan. Smaller debt may not be worth the patience to claim right away, and a larger debt may take a long time to recover.
   • If someone owes money to a business transaction, claim it as soon as possible. Waiting just makes it harder.

2. 

   
   
   Ask politely about the debt. When the time is over, ask the other party to pay the debt. At this stage, all you want is to make sure the other party is aware that their loan hasn't been paid. Sometimes, people simply forget the debt and only need a goodwill reminder. More formal, this is also known as an "offer of payment".
   • Instead of asking for payment, remind ("Do you still remember your money?") To save the person's face.
   • Provide all relevant information when asking about your debt. You should be ready for a reminder of the amount you borrowed, when the last payment was received, the amount due, any loan arrangements you are willing to accept, contact details and a deadline. clear payment.
   • When dealing with a company or client, formal mailing can be helpful. That will be the necessary written evidence as the situation escalates.
   • With a due date, usually 10 to 20 days from when the offer is received is a reasonable timeframe: it won't be too long, but not close to scare the other party.

3. 

   
   
   Determine the ability to accept other forms of payment. Is it worth the wait? If it's a small amount or if you don't have confidence that the other person will pay off the debt, consider allowing them to repay it with something else - providing a service or a favor is a good deal. If you feel the deal is acceptable. In this case, clarify the offer of replacement and get it back as quickly as possible.
   • Don't accept to negotiate too quickly, because in many cases it will be a signal that the debt can be bargained, or that the borrower can even extend more time.

4. 

   
   
   Stronger with "request payment". If the borrower does not respond, you should be more direct. Make sure that you have clarified your expectations for immediate payment, define your payment obligations, and provide specific refund instructions.
   • The language used should be more direct and express a bit of urgency. Phrases like "You need to pay now" or "We need to reach an agreement right away on this issue" will show the borrower that you are serious and will not accept negotiations.
   • When requesting, state the consequences of non-payment. Let the other person understand what your plans are and be ready to do them.

5. 

   Debt collection is more and more drastic. If asking for payment doesn't work, it's more likely that the other party has no money or simply doesn't like to pay. Your task is via phone, mail, e-mail or in person to gain priority: force them to pay you before they pay someone else (or run away).

6. 

   Use a debt collection service. This move shows you how serious you are and at the same time, helps you avoid contact troubles and arrange payments. The collection agency may charge a fee of up to 50% of the receivable amount. Therefore, before deciding to use the service, you need to determine whether earning a portion is better than getting nothing.
   • If the costs are too high, you might consider skipping this step and go to a competent court.

7. 

   Know where the limit is. When collecting debt on your own, certain actions may be illegal in your locality. If in the United States, federal law may apply if you are considered a debt collector under the federal Fair Debt Claiming Act. Chances are, you still need to obey local laws. While the rules may vary from place to place, in general, the following strategies should be avoided:
   • Call at the wrong time;
   • Additional charges incurred;
   • Deliberately collecting late money in order to increase fees;
   • Disclose information about a debt with their agency;
   • Lie about how much money the person owes;
   • Take out bogus threats.
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Part 2 of 3: Lawsuits

1. 

   Filing a lawsuit in the district court, where the defendant resides and works. Study the local court's law or website to learn how to file a complaint. The statute of limitations for initiation of lawsuits is 2 years from the date on which its legitimate rights and interests are infringed upon. If in the US, look to a special court that specializes in small debts with value limits ranging from $ 2,500 to $ 25,000, depending on the state. You can find websites and state court regulations through the exact link from the National Center State Court page.
   • If suing, prepare for your hearing. If there is a contract, debit note or any other supporting document, prepare enough copies for the judge and debtor or their agent. Do the same for any other attached evidence.
   • This can be a very drastic step. Make sure the debt deserves the nuisance that comes from appearing in court. If the other person is a friend or relative, this will definitely have a negative impact on your relationship.

2. 

   Apply to higher court. If unsuccessful or not allowed to apply in district court, go to a higher court. Counsel or hire an agent, fill out the right form and be prepared to go to court with all the necessary papers you can gather.
   • Considering the court and attorney fees, this option is usually more expensive. But if it succeeds, it may be more than just a debt collection service.
   • The threat to sue may have been enough for someone to pay. However, you should not threaten it if you do not really intend it.

3. 

   Apply for a subpoena. Once a judgment has been reached against the debtor, you can file a subpoena on the grounds that the other party did not pay, disregarding the judgment of the court. Along with the notice to appear in court, it is enough for the court to arrange the hearing and force the defendant to return, explaining the reasons for not paying the debt.
   • At the hearing, you should ask for the right to withhold the defendant's wages.
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Part 3 of 3: Get paid

1. 

   Collect money. After the reminder, request and lawsuit process, the debtor will be forced to pay. Sometimes just asking is enough. There may also be times when you need additional court enforcement steps to be fully repaid. It could be an enforcement order or lien.
   • If you have to sue and hire a lawyer to represent you, you should consult with them to take the most reasonable steps.

2. 

   Identify the debtor's agency. Once the court has given control of wages, it is your responsibility to identify and find the other party's agency. The easiest way is to ask the debtor directly. If they do not want to speak, you may need to submit an interrogation questionnaire - questions that must be answered in writing under oath. Check your local court website for the required written form.

3. 

   To the opponent's employer. Once they find their current employer, you will need to submit a set of questionnaires to confirm that the borrower is currently working there and that their wages have not been confiscated to the limit.

4. 

   Apply for a confiscation order. With confirmation, you can ask the court to issue a foreclosure order - the order is sent to the employer and the debtor's wages will be transferred to you.
   • Each locality has different foreclosure laws and so make sure you are familiar with residency laws.
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Advice

• Don't feel guilty about reclaiming what belongs to yourself. You do not swallow. The debtor has done so and you have every right to reclaim it.
• Remember to stay calm and don't let yourself get upset. New debtors should be upset because they have not fulfilled their repayment obligations. Be determined but polite. It will increase your chances of success.
• If payment is a very difficult issue for individuals or businesses, be very careful when dealing with them in the future.
• Keep all paper files in the collection process, especially if you have to go to court. For business transactions, keep legal records when possible.
• In this article, the collection process is presented for informational purposes only. Remember that each document that needs to be completed can be very different and follow a heterogeneous process. Do your homework before filing a lawsuit or hiring a lawyer.
• If you own a small business or are independent contractors, you may need a different approach when dealing with customers who do not pay.

Warning

• If in the US, on business debt, make sure you check the federal Fair Debt Collection Act (https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair- debt-collection-practices-act-text) and any other applicable laws. Otherwise, maybe in the end, you will be a sinner again.
• Be careful in disclosing to anyone that he or she has not paid you a debt, as you may be guilty of slander or defamation, depending on the case.
• If the debtor files for default, you must stop collection efforts immediately to avoid government default and collection laws.