When a close friend or family member comes to you in need, helping them in any way you can is the first thing on your agenda. Even if this means offering them a loan. Unfortunately, in your case, your good gesture wasn't exactly appreciated and the person you loaned the money to has failed to pay you back. You do have options. An attorney can help you recover your money.
If your personal requests for repayment have failed, it's time to rely on an attorney. However, there is some preparation on your part. First, it's important to collect any evidence you have regarding the loan. Although most people don't have promissory notes drafted when they loan money to someone close to them, you might have an email, text or some other message that discusses how much you loaned and the repayment terms.
Before your first meeting with your attorney, collect as much information as you can as this will come in handy should you need to file a civil suit. Otherwise, the situation could come down to simply your word against theirs.
Debt Settlement Agreement
One of the first things an attorney can do on your behalf is draft a debt settlement agreement. This type of agreement is basically a promissory note drafted after the money has been paid out. For example, if the person you loaned the money to failed to adhere to the terms of the promissory note, a debt settlement agreement serves as an amendment to the original agreement that offers the debtor a new way to repay the loan, such as smaller payments over a longer period of time.
Your attorney will set a time-frame by which the individual must respond and hopefully this will jar them towards paying you back.
After the agreement term has expired, if payment is still not made, legal action is next. Depending on the value of the loan, small claims court or a more formal civil litigation process will follow. With this motion, the first step is filing a claim.
A claim must present evidence that the loan was issued and that they debtor failed to respond in a reasonable amount of time, which is when your evidence will come in handy. Once this process has been initiated, it's imperative that you cease communication concerning the loan with the debtor as this can be a form of harassment and jeopardize your case.
If you loaned money to a loved one in good faith and they have failed to meet their end of the agreement, you don't have to count this as a loss. Let an attorney (such as one from Mauger & Meter) help you recoup your money.