When someone owes a debt to you and does not pay it, it can be frustrating and has the potential to leave you out of pocket. In this article, we’re going to provide six tips for getting someone to repay their debt to you.
Lending a family member or friend some money is a noble endeavor. But, if someone owes you money, you no doubt want it back as soon as possible. That means not waiting years and years to get the money that is rightfully yours, so we’re here to help.
We’ve come up with six tips to get someone to repay their debt to you in this article. It’s important to remember that these tips are just a starting point. Keep in mind that, if none of these tips work, it’s time to think about taking assistance from a litigation solicitor. So, let’s jump right into the toolkit to help you obtain your money.
4 Informal Debt Collection Routes
Sometimes, not everyone wants to take a formal route, especially if you’re a creditor, and it is the first time you need to contact them regarding paying the debt. Also, if they are a friend or family member you informally lent money to, you may not wish to go down this route either. So, we’ve come up with some informal ideas to help you retrieve your money, including:
1. Directly Ask For Them To Repay You
Perhaps you lent your friend a couple of hundred pounds but didn’t lay out a time frame of when you needed the money repaid. They might be waiting for a time when they’re financially comfortable to pay you back.
The first point of action would be to talk to them and ask if they are able to pay you back. If they aren’t able to pay you in full, then you need to arrange a suitable plan for the both of you where they will pay you in small chunks across a period of time.
If you are unable to come to a solution yourself, there are other options available, such as settling the debt dispute using mediation. Mediation is where an impartial party will assist in finding a solution by going back and forth between the parties to come up with a solution best suited for all involved.
The point of mediation is to avoid court, which ultimately can cost a considerable amount of money, and is a timely process. If you are interested in mediation, the GOV.UK website gives some further information and can provide mediation service options to start the process.
3. Put The Debt Request In Writing
Having a paper trail can be the best way to show your debtor that you are serious about retrieving your money owed. It might convince them to pay their debts back sooner. Having copies of the debt requests is essential, especially if you need to take them to a small claims court in the future.
4. Debt Settlement Agreement
It might be that your debtor is struggling with money and cannot afford to pay off the debt within the time limit that was originally expected. If this is the case, you can make a suitable arrangement that suits all parties involved. Whether that is a smaller monthly payment for a longer period of time, or something different that better suits them.
2 Formal Debt Collection Routes
If you are interested in a more official route – perhaps because you’ve attempted several times to reobtain your money informally or because you are a creditor – then there are options available, including:
1. Statutory Demand
A quick way to make somebody pay their debts can be through a statutory demand. If the debtor has not responded in 21 days by either repaying the debts or coming to an arrangement that suits you, then you can petition for them to go bankrupt. Or, if they are a business, you can request a winding-up petition against them.
2. Court Action
If you have attempted other informal routes, such as mediation, and it has still not resulted in you receiving the debts owed, then you can take court action to try and reobtain your money. Whether it is an individual or a business that owes you, you can make a claim through the county court, otherwise known as ‘small claims court’. It can be done online if the amount does not exceed £10,000.
If you win the claim, the debtor is bound to pay. Plus, if the judge decides they should pay additional costs such as compensation, court fees, solicitor fees, travel expenses, and loss of earnings, they will be obliged.
Unfortunately, if your claim is not successful, you will not get your courts fees back and could have to fork out money to pay your opponent’s costs. If you are interested in pursuing a claim, then the GOV.UK website can provide further details.
There Are Options To Get Debts Repaid To You
What you can take away from this article is that, if someone is not repaying the debts that they owe to you, there are both informal and formal routes you can take. We would always recommend approaching it professionally and politely without any confrontation.
They may be more opposed to repaying you than if you were to start a dispute with them. You want the process to go as smoothly as possible to prevent it from being costly and time-consuming. Then, if you reach a roadblock, seeking the advice of a professional should be prioritized.
Please be advised that this article is for general informational purposes only, and should not be used as a substitute for advice from a trained financial professional. Be sure to consult a financial professional or debt solicitor if you’re seeking repayment of a debt. We are not liable for risks or issues associated with using or acting upon the information on this site.
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