What to Do About "Friend" That Will Not Pay Back a Loan
May 21, 2012
I made the horrible mistake of loaning a friend of many, many year money. The friends were in terrible need or so they said at the time (in 2004). We had been friends since 1990 and we were very close. They had spent many vacations at our home when we moved away from them (from the midwest to NY to AZ). They split up over the years and I remained friends with both and was still very close friends with Kim who borrowed the money. She had told me countless times over the years that she would repay me and that one thing or another had come up that was stopping her from starting to repay me (I don't say us because she asked me specifically for the money and then I asked my husband). Well fast forward to October 2011 when due to financial circumstances I had to ask her to start paying me something every month. I asked for $50 per month if possible until the debit was paid off. She immediately became very upset and then the next week turned into a horrible event of her sending nasty texts to me. She said the most terrible things. I have tried to understand and still tried to hold out the olive branch. She sent one check of $50 in December 2011 and then has sent nothing since. She refuses to answer my calls or texts. I have no idea what to do. A friend suggested sending letters to her family telling them about the situation and putting something out online. What would you ladies do????
I wanted to thank everyone who has already responded to my question and to give some additional information to those of you who have asked. I do have full paperwork, i.e. the original Western Union transfer, the emails back and forth admitting the loan, texts admitting the same and a copy of the check send in December 2011. I also kept a log of the times she talked about the loan......little voice told me to. They borrow more than $1,000 and we do need the money back. Before I agreed to loan the money it was very clear that we needed the money back, although we understood it would take a while for them to get back on their feet and start to repay us. I should also add that this is not a friend of only a few years this is a friend of over 20 years. This is a friend that I would never have thouth could ever do this to us, both because of her beliefs and because of our close friendship. I have done all that I can do on my end and I know the friendship is over, easy to tell after the horrific things she has said to me. I did not feel that going to her family or making things public was the best thing to do, but my friends have made excellent arguments that it would be the best thing to do. I again appreciate all your help and suggestions!
Never lend any money that you can't live without getting back. I would write off the money, and the friend, and just forget about it. Don't waste the time or energy worrying about the money, or about petty revenge. Consider it a lesson and go on from there.
All the best to you. Good for you for helping someone when they asked! But don't let this upset you - and don't let it change you.
I would consider it a loss....BUT...first I would send her a heartfelt letter about how when she needed me I was there for her and now years later, I am the one that needs someone and how she didn't step up repay the favor. So much for being genuine 'friends'.
Letters to the family and putting something out online? WHAT THE HECK? Your friend sounds like a psycho for even suggesting that.
What should a sane, mentally stable, normal adult human being do? Realize that it's been years, you are not going to get another dollar back, and chalk it up to a lesson learned.
Just yesterday I had a post about an old friend getting "miffed" because I didn't call her when I was in town....she was acting like a fruitcake and picking a fight. I asked how to respond to it (when my natural instinct would be to sever the relationship with any "new" friend), because sometimes being friends with someone for a long time makes things a little harder to decide where the line is...things get blurred because of misplaced feelings of loyalty or whatever. But if you would even for a moment entertain thoughts of hurting someone publicly (online stuff) then you are no longer a friend. It'd be pretty grotesque for an adult to act like a 7th grade "mean girl". I would personally not want to be friends with the person that suggested it to you, because now you have to worry about what would happen if you ever make her angry!
This debt is old. Like, too old. Many bad debts get written off (after a ruined credit report) after years even from stores or financial institutions, so you should realize you're not going to be able to call this one back. Our family has a standing rule of practice that we never loan what we want back. If we're willing to give someone something forever, we will give it to them. If we get it back, cool. But a loan can be a relationship ruiner.
I had an experience similar to this 15 years ago and I learned that I wouldn't ask someone for a loan because I wouldn't want to feel stressed out OR guilty, or have a friend feeling weird. She really was a friend for many years, but after I loaned her money she stopped calling or going out...I wasn't bugging her about money but she was worried it was going to come up. It ended the relationship over time. What we do now? We GIVE money when we see a need and feel that something is warranted, and it's the direction we want to go. We also come up with ways to give money where it doesn't feel like charity when possible.
For example, we really like one of my son's coaches. We've known her for a little over a year, she's great with my son and is a hard worker, but got injured and found herself in a bind. We donated money to a place that could help her and asked if they'd direct it to the area she needed assistance in. We also asked her son to come help us with yard work and things like that, which brought some money to their home without it being blatant charity or a loan that makes things weird.
What should you do with this situation? Never talk to her again after the ugly texts she sent. It's over. And the money is gone. Now if you're experiencing financial needs, buckle down and figure out where to save, start thinking creatively on how to bring in some income (a part time job while husband is home to watch kids? start babysitting? is there a craft you can do, or some stuff you can sell, a service you can provide, can you refinance your home for lower payments since the interest rate has gone down again, are you able to take a loan from a real bank if that's the direction you want to go, etc). But don't try to chase up what someone "owes" you. You're not going to get it, and your energy could be better spent somewhere else.
If you absolutely need the money (and it's a lot), send her a note saying you will have to take her to small claims court if she doesn't make an effort to pay you back. Sending letters to her family or putting something online will only shame her. And it doesn't sound like you want to hurt her, you just want to get your money back.
This is one of those "life" lessons.
Loaning money to anyone is always a huge risk.
You have to always consider the fact that you may not get paid back.
This incident took place 8 years ago?
I think the statute of limitations may already be in effect, so you may not be able to sue. Do you have proof of the loan? Do you have a copy of the check she gave you in attempt to pay back the loan?
I think slandering them (on FB or by telling their family) would be a little ridiculous, even though you would be telling the truth. I doubt it would get your money back and it would only cause more strife for your friend who has already decided she can't or won't pay you.
What would I do if it were me? I'd drop the friend altogether at this juncture and be pretty pissed off at myself for giving the loan.
Whenever I "loan" money, I don't tell them, but I never expect to get it back. If they actually repay, then great, but if not, I already figured that into the equation. Also, having them sign something about how much they received AND when repayment starts and how much repayment will be leaves no confusion.
Think of this as a good trade the money for her friendship. Obviously, this was a good trade. She sounds like someone you don't want as a friend.
I joke with a few of my friends, "If I pay you, will you go away?" LOL Keep a sense of humor about it and call it good. Delete her number. Don't get her family involved....poor taste...and makes YOU look bad.
I have been in this situation with my sister (my daughter's birth mother, loans 10-18 years ago) and my daughter's current boyfriend (loans/expenses in the past two years). My sister needed money for school (yea right) and a new car multiple times.
The current boyfriend of my daughter's is just pretending it didn't happen/afraid to bring it up or I am the bill paying mama he never had. Getting his drivers license, school expenses for his trade school he finished, paying half of a new "old" truck (4/2011), insurance to get him started, AAA and a cell phone/service going on 21 months now, and not one of those cheapie phones, but NOT an iPhone.
With my sister it is totally lost because it is so long ago and I expected it. With my daughter's boyfriend it's a different story but the gravy train has stopped for the most part. The knucklehead quit his well paying job in January (good pay, benefits, 4/10 schedule with opportunities for OT). He decided to quit his well paying job and go back to school (He sees my daughter excelling, making new friends and is afraid he is going to be left in the dust). All he got this last semester was a 2 unit PE class and still doesn't have a job after four months...maybe they are expected to come to his apartment. He's not very proactive.
I went into this knowing I would never see it again...together it would be about $5,000 over the years. If I saw it again it would be a *BONUS*.
It's my fault, I knew at the time I would never see it again and it isn't money that would ruin our family if we never saw it again. It could be an awesome vacation but I can make that happen without them.
With my daughter's boyfriend, I am going to talk to him about the phone and the AAA card. The rest is long gone and I truly wanted to help him. I have learned my lesson though, unfortunately my examples are people who need to work it out for themselves.
Letters to the family or posting it online is crazy for a 2004 loan and just wrong. My mother moved to China seven years ago and unfortunately I am her closest biological relative and get calls fairly often from her debt collectors. Dude, she moved to China and I honestly don't know her telephone number but she's never coming back either.
The best way to make a friend into an enemy is to loan them money.
The best way to become estranged from a relative is to loan them money. That is IF you ask for repayment of the loans.
I'm the only exception that I know of and it almost happened to me. My parents loaned my wife and I $4000 so we could have the down payment for a home. They didn't set up a time frame for repayment. I must admit, I forgot about it. Then one day my dad asked about it. And the following month he asked about it again.
My wife and I felt really bad about not having made any payment. I forgot about the loan. So my wife and I decided that we wouldn't eat out any more and wouldn't spend more than $400 on any annual vacation until we repaid the loan. We sent my mom and dad a check for $100 and put it in a 99 cent "I'm sorry" card from Walmart. We gave up steak and shrimp and had many meals of mac and cheese with hot dogs. We sent them a check for $50 to $100 almost [:~(( ] every month until the loan was paid back. [8~)) ]
Every time I have made a loan to a friend or relative, I have thought of the loan as a gift. I have been surprised occasionally, but by and large, I have just forgotten about the loan. I believe in the power of prayer, and to get past the ill will I felt for one person I loaned much needed money to, I asked Him, that He let me forget the loan. And it worked.
Forget the loan, and figure any payment is a gift. You'll feel much better in the long run.
Yep, don't think that you are getting this money back. Live and Learn. She obviously has no intention of paying you back. You will spend more time and aggravation that it's worth to try to get your money. Cut ties and move on.
This is a life lesson. People who need to borrow money from friends and have no credit rating are generally (but not always) people who don't know how to handle money and are not capable of paying you back. (there are always exceptions - so please don't bomb my inbox) Understand that this was money you'll never see again. In the last year my husband "lent" my nephew and a childhood friend of his each a couple/few hundred dollars. In both instances we know the likelihood of getting it back is pretty slim. So althought we tell the other person that it's a loan, in our hearts we know it's more of a gift.
As much as there's all kinds of discussion in politics about everyone getting their "fair share" - the truth is that God blesses those who can handle money with money. Those who can't handle money will squander it no matter how much or how little. Money slips through their hands. My mom is a perfect example of someone who can't handle money. She always paid her bills but would rather spend her excess than save any of it. So she arrived at old age with nothing. My husband's sister's family is another example - they get take out dinner and buy their breakfast & lunches at delis all the time. They spend way more on food than they should because they don't prepare any of it. They don't have a pot to p-ss in - and now both husband & wife are disabled with no resources to fall back on (both were nurses so they made a decent living). Then again, my aunt who jsut passed away - she's on the opposite end of the spectrum. She lived her life very carefully - she rarely ate out, she always stayed the same size and bought classic clothing so was able to wear the same clothes for years & years. But she saved her money - she traveled all over the world (China, India, Europe, etc.) In her old age she didn't have to worry about finances and was able to pay an aide to take care of her in her final months / weeks. She died with more than $1,000,000 in assets and she worked in the insurance industry in administrative roles). You see it's not about how much you make, it's about how much you spend vs. save.
Realzie that you'll never get your money back from this former friend (if you do it will jsut be a bonus!) and do NOT send leters to her family or post things online. How very childish. You've learned an expensive lesson - move on.
Sorry, you will not recover the money and the friendship is lost as well. This is why I do not lend money to friends and family. We could go on the should have (witten contract with terms) and could haves. The long and short, the money is a loss.
However, in any of your correspondences, does she actually admit to owing the debt? If she does, you could use that in Small Claims Court, even without a contract, IF she admits to the debt. If she doesn't, bye bye money.
Do NOT send letters to family nor post on line. We are adults and this is partially your fault in that you did not secure a contract with her. After this much time, she probably thought you had forgiven the debt. Cut your loses with her. I would not hold any more olive branches to her. I would have a big problem continuing the friendship after this, but that's me.
You just have to let it go. She is never going to pay you back, ever. It is past the point for her to feel like she owes you something now.
I think you have gone beyond any reason to contact her again. She is in the past, live for the future, do not loan any money, if you have it give it freely to someone that has a need you can meet. It will be less stressful for you and you will feel better about doing it.
why do anything? honestly, $50 per month is not going to break you. you CAN live without this money (and you shouldn't have loaned it to her otherwise). you have all this time. you need to let it go and consider it money well spent to rid you of such a "friend".
don't loan anything you can't do without. consider it a gift. then if it is repaid, great. if not, no biggie. loans do...THIS....to people.
Just let it go. Learn from this experience or you could drag her into court. If you have the email or some kind of paper trail about the loan and how much money she owes you etc but has been my experience to just let such matters go.
My personal policy for lending persons money is to never lend money I will miss in the future. It's more like a gift in my mind than a loan this way if they don't pay me back I'm not bent out of shape by it.
Honestly I would let it go. It's not worth the internal stress and will free you up to think of ways you can get the money you need through your own ingenuity instead stressing about money she obviously isn't going to pay you back.
Also understand if the amount is over the small claims court set limitation you won't actually be going to small claims court but the next court up which requires so much more paperwork on your part but it could be worth it.
Is it an amount that you can forfeit? She obviously can't afford to pay you back, and your constant "pestering" her is causing embarrassment and anger. If you are a true friend and dont' want to lose the friendship, consider it a gift and let it go.
If you really want back the money that badly, go thru the legal system.
I'm so sorry you are going through this and are facing tough times yourself. You were really trying to help a friend, and I'm guessing that right now you are feeling very unappreciated. Now that you could use her help, I'm guessing you might feel somewhat betrayed. You were there for her, but she's not there for you. I'm just guessing. I do not mean to put words in your mouth.
My guess is that she actually feels really guilty for all that has happened. She probably does know that she let you down. Maybe she's thinking of times that she splurged a little rather than paying you back. Perhaps she's just embarrassed that she hasn't been able to get her act together and pay you back. Unless she's just incredibly selfish, she's most likely turning her embarrassment into anger and taking it out on you.
I think right now you have to decide whether or not you want to continue the friendship. If you do, you might consider driving to her house (since she's not answering your calls or texts) and reaching out to her, letting her know that you're done talking about money and that you just want her friendship.
If you are not interested in continuing the friendship, I think you just have to close this chapter in your life.
One of the reasons it's recommended that you don't loan money to family or friends is that it changes people and it changes the relationship. Usually one of the parties involved ends up resenting the other. Sometimes the loaner resents the borrower for not paying them back. Sometimes the borrower resents the loaner for being in a position to loan money when the borrower didn't have it. It's not always logical when emotions and pride are involved.
Above all, try to remember that this is not about something you did wrong. You really wanted to do something for a friend and that is to be commended! It didn't work out the way you had hoped, but please do not lose that desire to be there for people. It is really a part of you that will always make you shine!
I would let it go. I would open that file in my brain and reclassify the transaction from "loan" to "gift."
You could make a stink about it, but that doesn't mean you'll get the money. It just means that everything will be more stinky.
Money is a well-known separator of friends. One would think it would be just the opposite - that friends would be the best helpers - but it doesn't work that way with most people. From now on, if a friend needs your financial help, give a one-time gift, or introduce her to your favorite, most trustworthy loan officer at your bank.
Gosh that's awful, what an ungrateful B! Agreed with Mama2cade send her a letter or email and if she doesn't reply take her to small claims court. Include the ex-husband if they were married at the time and he benefited from that money also. Hopefully you still have some record of the loan, good luck.
1.) I'd forget repayment from the friend. When you loan a friend money, you haver to be prepared for it to be an unintended gift. Otherwise, it will become a source of stress which damages or ruins your friendship. I've only loaned a signficant sum of money one time. It was to my best friend of more than 20 years, and she told me that if she had anywhere else to go that she would. She hated asking, and it was uncomfortable to us both. She told me her repayment plan prior, and I asked that she not tell anyone other than her spouse about the loan. I specificly did not want other friends or either of our families knowing about it. I figured that I would probably see no more than a fraction of the money again and accepted in my mind that it was probably a gift. My friend and I have never spoken about the money since the loan was made. She sends me checks when she can, and the loan is almost repaid...not totally on schedule, but paid. To this day, I do not know why the money was needed except that I know she was in need of help with few options.
2.) If you have any documentation of the loan, you can write it off on your taxes as a bad debt. In that way, you'd at least get some of your money back. Even more, the IRS counts the amount of the debt against her (and probably her ex) as "income" that they owe taxes on. You'd have to talk to a tax advisor about what documentation you need to be able to do claim that. For small claims court, you may be past the statute of limitations. The ONLY thing that would potentially work in your favor is that she sent you one payment last Fall, and that would be a long shot.
your first sentence sums it up... you made a horrible mistake, that's pretty much the beginning and end of the situation. you're not gonna get the money back, she's not your friend, and i'd strongly advise you to NOT send out letters or post the situation online unless you want to open yourself up to legal repurcussion for doing so... you say you have no idea what to do - let it go.
Honestly, you probably won't ever see it again. You don't have any legal options either since I'm sure this was just given in a nonofficial way. My dh had this problem with a friend too...this person does not sound like someone you should associate with. Cut your losses and move on. I think most of us have had this happen. I know other people who let a friend stay with them for a month and it turns into a year. They end up kicking them out. No good deed goes unpunished. It's not fair, the good guy ends up as the bad guy.
You have a very generous heart. This person does not deserve your time, energy, or money. I think it is time to move on and let go. This friend betrayed you in many ways. Healing will happen once you begin to let go. It is so hard to let go when an injustice took place but it is possible. Cut her lose out of your heart, mind, and soul! Your energies are better spent elsewhere.
Kiss your money goodbye. Lesson learned......do not lend money to anyone especially friends. You will lose the friendship over it. She probably does not have it to pay back. Can not get blood from a rock.
Honestly? I would write her & the money off. The thing about "lending" money to a friend or family member is that unless you can afford to never get it back, you should not lend it in the first place. You have consider it a gift or a good deed.
I can't tell you how many people I know or have seen in this situation & what started as a nice gesture ends up with the ending of a longtime relationship. She obviously is/was not a good friend & is not worth any more of your time or energy. The way she is treating you even though she is in the wrong, says a lot about her character.
I think you have two choices, and neither of them are calling her family or posting this online. You can let it go along with the friendship and consider it a lesson learned, or you can take her to court. If you plan to take her to court for the money, you'll need written evidence of how much the loan was for, and that it was a loan (i.e. she expected she would have to pay you back). Also, find out what the statute of limitations is in your state.
Either way, the friendship is probably shot. It just depends how badly you need the money. Good luck.
Depending on the amount, small claims court may be the way. But most likely, you will just need to write it off. You can't get blood from a turnip. Do not lower yourself to slamming her on-line or contacting people that have nothing to do with it. If someone were to contact me about a relative's debt, I would laugh in their face and I would not tell the relative. Chalk it up to a lesson learned.
If it was more than a grand I'd say it might be worth looking into small claims court. Boy will that piss her off though if she already went ballistic over your polite suggestion of a repayment plan. Yikes.
Bummer about the friendship, looks like she left you high and dry.
I agree with Everley, I think people should be held accountable for their debts. Otherwise, if it's not a large amount, or you don't really need it (though who doesn't?) just let it go and chalk it up to a life lesson learned :(
Well did you get anything in writing at the time of the loan or did you write a check to her for the loan? Anything that would prove the loan was made? If so, then I would send her a certified letter demanding repayment by a certain date or you will have no other choice but to sue. Sounds like she doesn't think of you as a friend anymore and hasn't for some time. So you should not refer to her nor treat her as a friend anymore. If nothing was in writing, can you get in touch with her ex-husband and ask for his help?
You could sue her in small claims court to get the money back. Since she made a payment in 2011, you're still within the statue of limitations. You would have to show proof that it was a loan and not a gift. The fact that she started to repay (along with any emails or texts) would show proof of that.
Or you could just let it go and never talk to the ingrate again.
Whatever you choose to do, you've lost this friendship.
You could take her to small claims court, but you don't have a paper signed by her saying she owes you money, so I doubt that you will get a judgment against her. You'd need to ask a lawyer. Sometimes you can get one free chat with a lawyer, so you might try that.
This is an expensive lesson, Mom. Don't loan anyone money every again. She cared more about your money than she cared about you.
The fastest way in the world to lose a friend is to loan them money. My husband and I have loaned money to friends before but told them that if they can't ever pay the money back just promise not to stay away from us because of it. Guess what? They always stay away from us and lose our address, telephone number, cell number and E-mail address. This is after promising not to stay away from us if they could not pay us back. So, now when people ask for money we just tell them it's invested and we can't get our hands on it right away. Saves a friendship and our money at the same time. Some people are just jealous and feel like they are entitled to your money. Well, they aren't so don't feel guilty about telling a fib.
Oh my goodness....I feel for you so much! Now you know what kind of friend she is.....it's too bad that you all have such a long history, and your friend definitely is showing no gratitude of your generosity at all! It's a good thing you kept all the documents of this loan. There is a statue of limitations, and usually that is six years. Check out to see what AZ statue is. If you are past the statue of limitations, then you have no case....but if you're not, then by golly, go file a small claims case at the municipal court house. Then after all is said and done, wash your hands of her completely. She was a good friend for a long time, but now she has shown that she has no respect for you nor the fact that you need that money back for your family. It wasn't long ago that I was in a similar situation. Good luck to you. If you expose her online publically, at least there will be others that will be fair warned not to loan her any money, and she can't come back at you with defamation, or harrassment because it's not defamation if it is 'true', and it is not harrassment if you are asking for your money back. I watch all the judges on tv, and every one of them have said that. :-D Wishing you the best....There are honest people out there still who wouldn't do this to you, but because of this, I wouldn't loan anymore money out to no one....not even family members. The only people we loan or borrow from is my parents, and they always pay us back and we always pay them back. My husband lost his job last year and we were on welfare for 11 1/2 months. My parents helped us keep our truck (the only vehicle we have), and helped us with a lot of other things as well, and when we got our tax refund back this year, they were the first to be paid back. It should always be that way, whether or not you borrow from a friend or family member....when you get the money, they should come first in repayment. It's sad that so many don't think that way. I can tell you a couple more experiences that my husband and I have been in, but this book here, would turn into a novel. LOL Good luck once again...hopefully you can get this resolved.
No one can answer this question well unless we know what outcome you are most hoping for. Is getting the money back the outcome you are most hoping for (no judgment if it is, especially if you find the friendship a lost cause and need the money)? Or is making peace and retaining the friendship while being paid back the outcome you are hoping for? If its the latter, you're chasing a rainbow. If salvaging the friendship is on the table and what you want, then forgiving the debt is the ONLY way. But I'll eat my shoe if you ever see another dime from her, no matter who you contact. The only way I'd contact the family about the money is if there is a suspected drug addiction problem involved and you can swap stories to get a better picture of how to handle her in the future.
My parents found themselves in a a very similar situation with their best friends, giving them hundreds of dollars per month for living expenses and cosigning a loan for schooling. They divorced, neither ever did get their finances in a stable place and my father to protect his credit ended up paying over ten thousand towards the loan. There is no way in hell they could pay it back. My father forgave the debt, but the friendship crumbled anyways. So sad, the friendship also spanned two decades and they vacationed at our house all the time.