Paying It Forward: How to get friends who owe you money to pay up

Aneth Ng-Lim

Posted at Sep 30 2019 09:25 AM | Updated as of Sep 30 2019 09:27 AM

In moments of weakness, I’ve said yes to friends borrowing money. One had a brother in the hospital, another needed to pay off a credit card and then one had to fund a school trip for an academic competition.

Don’t get me wrong. I wanted to help but on hindsight, I wasn’t sure I was really helping. For the friend with a brother in the hospital, we worked in the same office that had a strict policy against borrowing money from colleagues. That policy was in place because we’ve had problems in the past and too many relationships had turned sour when borrowers would not pay. So you could say by helping her, I also put myself on the line. Plus our office did have a generous employee loan program. For medical emergencies, one could apply for one and pay nominal interest rates. I pointed that out to her several times but she still came to me, more than once.

With the friend that owed her credit card issuer, we were both suffering from the seemingly endless collection calls. It would start around nine in the morning and continue through three in the afternoon. It was painful, and I wondered if her designer bag and shoes gave her comfort during those trying calls. Then one morning she came to me and said she had sold the bag and the shoes and just needed a small bit of cash to pay off the entire loan. I lent her the amount and the calls stopped for about two weeks. Then they restarted, and what do you know, the bag and the shoes reappeared on her arm and feet. I never saw my money again.

This thing with the school trip, I shake my head every time I remember because I could have gotten all my money back if only I had a debt collection plan. More than a year after I gave her a loan, she still owes me and she is strutting around with AirPods – original and second generation – while I am still using wired earphones.

Yes it can be awkward collecting money especially if they are close friends and you do not want to lose them. If you can afford to forgive the debt, that’s fine. But the way I see it, by not paying, they already lost you, so at least get your hard-earned money back.

#1 Time to remind them of the debt. 

Maybe they really forgot. If they borrowed money for a medical emergency, and they had to approach different people to raise the sum they needed, maybe, just maybe, they did not remember all of the people they borrowed from, and how much they owe. This is on them so you should not feel embarrassed about asking for your money.

But you have to ask, especially if time has passed and they do not even mention it. The longer you delay, the less the likelihood you will be paid.

#2 Be ready with “proof.”

Say they really forgot. It would help you to have proof to show. Did you issue a check when you gave the loan? Or did you hand over the money through someone or with someone in the room? Borrowers conveniently forget details and the more “proof” you have, the harder it is for them to pretend ignorance.

Once, someone even had the nerve to tell me she had paid the loan! So I asked her when and how – and she could not recall. I put my foot down and said “I remember you borrowing money, but not paying. If you did, believe me, I would not be calling you.”

#3 Set a date and hold them to it.

One reason debtors do not get paid is when loans are extended with no payment deadlines. Friends tend to say they will pay you back on their next payday, or in a month and then disappear. So when you remind them and show “proof," pin them down with a date.

Tell them you need the cash by October 15. Give a compelling reason like tuition for the second semester if you have kids. Or a trip that you have to take to visit family. You do not really need to justify why you need to be paid, but since they are not paying, you have to communicate a sense of urgency or never see your money again.

#4 Follow up in person.

Nothing like face to face to make this a very uncomfortable conversation for you – and for them too. But the goal here is to be paid so force a meeting. Drop by their office. Pass by their house. Taking time to see them will make them realize that you “seriously” want to be paid, and likely need the money they owe you.

Sometimes, a face to face is also a good way for you to see your friend’s capacity to pay. If they look healthy, well dressed, using the latest mobile phone model, and even wearing AirPods, why yes, they can certainly pay you! If they look troubled, maybe you can agree on a more flexible payment plan.

#5 No cash? Consider taking “collateral”.

Sadly, people who borrow and do not pay rarely have cash to pay off loans. There could be good reasons for this, or they could just be poor money managers who spend more than what they earn. If the latter is true, consider taking “collateral” instead of walking away with nothing.

Once, a friend borrowed money so she can buy jewelry (she said it was dirt cheap – I said no), and another one was asking for a loan while she clutched a designer handbag that cost more than my monthly pay. While I am not interested in jewelry or designer handbag, better these than nothing.

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It’s never a good idea to lend money to friends or family. Gifting them with it, in cases of real need, is much healthier for your sanity. So next time someone comes knocking, think twice or even three times before saying yes.

Disclaimer: The views in this blog are those of the blogger and do not necessarily reflect the views of ABS-CBN Corp.