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Back in 2018, in June, a friend working in the UK (let’s call him Dave), asked me to lend him money because he has “family problems” mentioning he will return them by August, 2018.

Things did not go as expected: he divorced his wife, and could not return the money by August, 2018. Not only that, but he got the vice of gambling (I do hope he gave up on that by now).

Every time he set another deadline for sending me the money, but could not do it because of new problems.

The total sum to return is 10k EUR.

Currently he has girlfriend, and they sent me €500, saying that they will try to do that every week. That happened only once tho.

Now Dave has to pay lawyers to solve some problem related to his son, he has to pay invoices, car tickets, car rates etc.

So, I am in the situation of having a friend who can’t return the money now, he and his girlfriend ask me for patience, and I don’t see any plan from them to return the money.

Dave works very hard, getting around €1000 / week, and I have enough money, not really depending on the money I have to get from him.

While I can wait more, I would like to know that’s the best way to make a good plan for them to return the money.

I don’t want to use force, because I can imagine he has a hard time already, and the worst thing would be to fall in depression or even worse things.

What can I do? How should I communicate with him to return the money? Would it be an option to contact his family (brothers and parents) to make things more transparent for everyone (I do have the feeling he hides some things from me because he does not want me to talk to her brothers and parents)?

Taking legal steps at this point is too early I believe. That would make him even more stressed.

Given the political changes in the UK I am also afraid that things can get even worse for Dave: he is not UK citizen, the GBP/EUR rate may change in his favor or not etc.

We did not sign a contract — I only have the discussion history (Facebook Messenger) and the TransferWise transactions.

John
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    "he got the vice of gambling (I do hope he gave up on that by now)" I would be certain of that before lending him another pound. Did he give any details as to what the problems were? Is there something you could do to help other than sending him cash? – D Stanley Oct 22 '19 at 14:16
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    It sounds like he has a gambling problem, and everthing else is fog and smoke... – Aganju Oct 22 '19 at 14:27
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    Consider the loans is burned for good, like some utilities or insurance . If you get something back, you should treat it as a bonus. – mootmoot Oct 22 '19 at 14:59
  • Without a car, €1000 / week is decent earning even after tax. It depends on whether Dave willing to give up his car to save up €100~€200 every month to pay off the loan. – mootmoot Oct 22 '19 at 15:09
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    Do you have a signed contract? If not, then this money may be noncollectable anyway. – Pete B. Oct 22 '19 at 15:59
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    As long as he "has a gambling inclination", do not let him offer unrealistic repayment plan as he won't be able to honnor them. Gambling people have many times their income worth of money going through their hands in a given period. This is not an actual income, but for many it makes them loose track of what level of financial commitment they can take. Many end up thinking they can repay large sum of money instantly the next time they have a lucky streak, so they shy away from "small regular arrangments" (which in most case is the only commitment they could actually honnor). – Hoki Oct 23 '19 at 12:22
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    What does Brexit have to do with all this? – onnoweb Oct 23 '19 at 14:54
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    Sounds like an interpersonal issue more than personal finance. Have you considered posting on IPS? – Aubreal Oct 23 '19 at 15:36
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    @onnoweb not least, OP's legal options for recovery will change. – Harper - Reinstate Monica Oct 23 '19 at 17:15
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    You guys going after the guy for gambling really seem to be reading a lot into a single sentence. – corsiKa Oct 23 '19 at 21:15
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    It sounds like he wants to pay you back in theory but in practice lacks the discipline or stability necessary to accumulate enough money to pay you back. Which suggests it will be a long time before you get your money back if ever, not that the person doesn't mentally think they will pay you back. – Mark Rogers Oct 24 '19 at 03:24
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    @PeteB. A signed piece of paper is not in any way a requirement in English contract law. If OP has sufficient evidence to establish the arrangement on the balance of probabilities (e.g. text messages), and can establish the legal criteria for a contract, then it will be enforceable. – JBentley Oct 24 '19 at 10:08
  • Since borrower is not a UK citizen, AND has financial troubles, is there a likelihood UK will deport him. (Asking). If yes, then that would make it harder to collect. And might taking legal steps to collect bring the situation to the attention of the border force? (Again, asking) – WGroleau Oct 24 '19 at 17:57
  • I'm in a pretty similar situation with a friend having no current job, bank debts and confiscated property. For now, I just let it go. If he'll recover I will then ask him again for my debt. – Overmind Oct 25 '19 at 12:36
  • You received one large repayment, which seems to indicate some good faith. Have you tried asking for much smaller regular repayments? Like €25 / week? That might be more achievable for him. – DaveG Oct 25 '19 at 18:29

7 Answers7

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As a general rule of thumb, when lending anything to a friend or colleague, never lend more than you would be willing to give as a gift. If it gets repaid, that's great. If it doesn't, chalk it up to the cost of learning a lesson about this person's character, and never lend anything to them again.

In Dave's case, your comments indicate that you still consider him a friend, and that you care about his situation and well-being.

I'd suggest that you choose one of these future paths for your own well-being and peace of mind:

  • Continue being Dave's friend, but accept that you'll likely never get your money back. Your friendship is worth more than the money you lost.
  • Stop being Dave's friend, and count the loss as a valuable life experience.
  • Stop being Dave's friend, and treat his debt like a business situation, taking legal steps to reclaim what you can. Do not take on any guilt about this decision; Dave is in the wrong, not you. (In the last year did he and his girlfriend ever eat at a fancy restaurant, take in a play, go out drinking with others, etc.? Every time, it was paid for with your money.)

Whatever the case, as a favour to both of you, please have enough sense to never lend him another penny.

Ray Butterworth
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    Trying to collect on the debt via legal means most likely is futile and a waste of time and money (for the attorney). There is no written contract and Dave's gambling problem will ensure that he is penniless often enough. There will also likely be other creditor with written contracts which have a better claim. Going the legal route might help bring peace of mind ("did everything you could"), but could also exacerbate the situation, keeping it alive. – Chieron Oct 25 '19 at 06:51
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    I feel this is a bit of a useless answer. It’s not really answering the question of how to get the money back in a realistic way, but just gives some very generic advice about the options that basically everyone can figure out. As Dave obviously did give 500€ by himself, assuming he won’t try anything except by legal action is a stretch. – Sebastiaan van den Broek Oct 25 '19 at 10:21
  • @SebastiaanvandenBroek, read the third choice. If he really wants the money, that's the only way that is going to work. If Dave had any serious intention of repaying, he'd make at least a token payment every time they met. But he doesn't. Until his wages are garnished, he's not going to pay. – Ray Butterworth Oct 25 '19 at 13:10
  • "Every time, it was paid for with your money." Well, if it was his treat yes - if she paid for it not really. She is hardly entitled to pay off her boyfriend's debt. – xLeitix Oct 25 '19 at 13:59
  • @Chieron, agreed +1. Going the legal route will almost certainly not get the money back, and definitely not all of it. And the time and aggravation wouldn't be worth it to me if I were in that situation. But as you say, some people need some kind of closure, and having a court effectively declare Dave to be a deadbeat might be enough. – Ray Butterworth Oct 25 '19 at 15:24
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    It's not a useless answer. It's as good an answer as possible for a question with a faulty premise. That faulty premise being it's possible by some properly devised action to extract your money and keep the friendship. The answer enumerates every possible course of action in substitute for the impossible premise. – user1169420 Oct 25 '19 at 18:04
  • Paying €10,000 for a valuable life experience is a bit expensive, but it could have been worse. And the answer wasn't useless. The rule: If you lend money to a friend, be prepared to lose either the money or the friend. – gnasher729 Jan 19 '23 at 16:06
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I assume the goal here is for both he and you to feel some progress is being made toward repaying the loan, even if in practice very little is done towards achieving the final goal of total repayment. Realistically, you may need to write this off as uncollectible, depending on your actual relationship with Dave.

Half his salary (let's assume his girlfriend is not obligated to support him or his debt in any way) was an unreasonable payment plan. Some smaller amount, such as €50/week or less, may be more reasonable. Though it would take quite a while to repay €10,000 at that rate, it would be something, and could be increased if his circumstances improve.

chepner
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    4 years isn't an unreasonable term for repayment of a loan that size. €50/week should be achievable if your friend has any intention at all of settling this debt. – NL - Apologize to Monica Oct 22 '19 at 14:57
  • Just based on the question, which states the debt is only a year old and the OP seems rather anxious about it already, four years is pretty long (especially compared to the proposed 20-week repayment that turned out to be as unrealistic as it sounded). – chepner Oct 22 '19 at 14:59
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    If something unrealistic didn't work, it seems only logical to try something realistic next though, right? – NL - Apologize to Monica Oct 22 '19 at 15:02
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    Well, yes? That's what my answer suggests. I'm just framing the 4-year wait in terms that would seem to reflect the OP's expectation of how long it should take to get his money back. – chepner Oct 22 '19 at 15:04
  • This is the only sensible approach, if continuation of the friendship is desired. Considering his significant income, discuss a plan and weekly sum that he can repay you without hurting him and his family too much. Anything you can get back is a gain for you. And please ensure he's really off the gambling habit.. that's an important obligation, not only as a lender, but especially as a friend. – WooShell Oct 23 '19 at 11:47
  • Came here to write this answer. I fully expect your friend will find his situation does improve, and he will pay it off much faster. – Harper - Reinstate Monica Oct 23 '19 at 17:17
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    Even 25EUR per week (~10 year repayment) might get traction. – Yakk Oct 23 '19 at 18:09
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    If you do go for a "payment plan" type option, document the details in writing. Even if you'd never consider legal action against a friend, the fact that it's "official" makes it harder for your friend to rationalize ignoring the debt and makes him more likely to stick with it. – bta Oct 23 '19 at 19:33
  • Heck - you could always just have him pay 10% of his income until you've been repaid. If it works for religion... – Wayne Werner Oct 24 '19 at 14:59
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    Can we stop quibbling over the exact amount, when none of us are party to the loan? The point I was trying to make in the answer was that a smaller periodic payment acceptable by both Dave and the OP could help both parties feel the loan was being repaid in good faith. – chepner Oct 24 '19 at 15:02
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    This is a very sensible approach. The pain for Dave should be rather minimal on a 4k monthly salary, OP still gets a monthly payment, and none of the two get into the mindset that this debt is forgiven and forgotten. – xLeitix Oct 25 '19 at 14:03
  • I'd add to this to suggest to make the payment automatic on his payday, and to set that up after you've reached an agreement on the exact amount and cadence of payments. Frame it as you don't want your friendship overshadowed by reminders to pay every week or something like that. Otherwise he will forget (or "forget"), and you'll still never see it. – Kat Oct 25 '19 at 15:45
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So, I am in the situation of having a friend who can’t return the money now, he and his girlfriend ask me for patience, and I don’t see any plan from them to return the money.

I would just let it go and write it off.

Dave can't pay you back or he would have addressed it already

The fact that you can't cite a reason for the loan (i.e. Dave broke his leg and had medical bills) is a hallmark of someone who cannot manage money. A very common scenario is that Dave was probably simply servicing his debt when he had something happen that he couldn't pay with more debt, or he needed to pay off one debt to take on more debt. Reminders and payment plans are nice for responsible people. Dave may not be in that category.

You won't be able to collect without reminders

Even if you're friendly ("Hey Dave, about that €10k..."), you're now just another bill collector to Dave, probably in an ocean of bill collectors. Dave will either placate you, regale you with sob stories, or pay you small amounts inconsistently (Hence your €500, followed by months of silence).

Even if you care nothing for Dave, the time and effort to get money back just isn't worth your time. If Dave brings it up, talk honestly with him, expressing concerns for his situation. Remember that if Dave does bring it up he has some concern for your relationship. If you kill that, the chances you see anything diminish greatly.

In some rare cases, people like this will not rest until you are repaid. Dave paying you something when he can is better than nothing at all. I've had people I "loaned" money to (without any real expectations of repayment) do things out of their way to aid me.

Community
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Machavity
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As you say, Dave makes €1000/week. Best case, his plan of €500/week only leaves 50% of his income. If that is pre-tax then it's an even greater percentage. From this and all the other things going on in his life it's clear that was going to be very difficult for him to follow through with.

However, the fact that he came up with this plan (even though he didn't stick to it) signals that this debt is probably weighing on him and that he wants to repay it, but he isn't sure how to realistically make that happen. Since you don't urgently need the money, I recommend collaborating with him to work out a realistic agreement.

This should include the amount (€9500), payment schedule, interest rate (if any), late fees, and cancellation policy.

For example, maybe he can swing 10% of his income and 24 months is acceptable to you. With no interest that would be €400/month for 23 months and €300 the last month.

For the cancellation policy how late can his payments be before risking cancellation, how much notification do you have to give him once that happens, and what happens if payments are still not made by the deadline? Ideally he would put collateral of sufficient value at risk of being forfeited to you in such a case (if it is his car make sure you know how much he still owes on it!).

Once you have agreed on plans, write up a contract, sign it, and stick to it. This will give both of you clarity and clear expectations that you have both have agreed to, so hopefully this will help reduce/remove this added stress and uncertainty from both of your lives.

Personal Background:

I took a similar strategy with a friend (who happened to be going through a divorce as well) for selling him my truck. For the details, it was 0% interest and no late fees, with the cancellation policy as "If a payment is not received within 90 days it is due, owner may give a 15 or more-day notice of cancellation of this contract unless payment is received in that time. Upon cancellation in this manner, full ownership returns to seller." Further, I included "This contract may be amended at any time if both buyer and seller agree to the new terms." to make it flexible. This was nice because we did end up tweaking it about a year into it because of some minor difficulties with the first version. Finally, I thought about the worst case scenario, e.g. him not making further payments and totaling/taking off with the truck, and decided I was okay writing it off as a loss/life experience should that happen. This method has worked well for us (started 4/22/2017 and is scheduled to finish 3/22/2020), and even though he moved to another town in the meantime we are still good friends and keep in regular touch.

Hope this helps!

Briguy37
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I could be wrong about this, but I don't believe you have any legal recourse in the UK to get your money back. I believe this would be called a 'social debt' and legally is secured only on the borrower's good name and word if nothing was signed.

Phillip
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  • Looks to me like there is an offer, acceptance of the offer, and legal consideration. Unless there was a very clear intention not to create legal relations, then there is a legally enforceable contract under English contract law. There is no requirement for a contract like this to be in writing (although that can make it harder to show what was agreed). – Steve Kidd Apr 06 '21 at 09:15
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To me it sounds like you still consider Dave a friend. So why not talk about, friend to friend?

Why not schedule a meeting, and sit and talk with him (if you can, geography depending) about the debt.

Say you would like to be repaid and work out between you a payment plan he would agree to, something he is comfortable with paying. He can set up a standing order to pay X per week/month. Most UK banks allow setting up of Standing Orders with a set payment period up to a certain date or certain amount.

hawkyhawk14
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Of course you won't take legal steps as it will kill your friendship, I don't think I would take the risk. Since Dave is not in a good situation, and as your friend, I would recommend you to keep in touch with him, asking him how his situation is, grab a drink sometimes or every small acts that would help him feel better until his problems are resolved. Not only he will remember what you did for him, he will also return your money when he will be able to do it.

Be warned that I advice you this because i assume that you trust him, if not this may be an other problem.

Hastur
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