When a stranger owes you money there are a number of practical or legal steps you can take to resolve the problem. If the debtor is a friend or relative however, the situation becomes much more complicated. The biggest problem is dealing with the emotions involved your own, and those of the other person.
Knowing that someone you care about has broken a promise, or even lied to you, is very hurtful. It is a betrayal of your trust. At the same time, you might worry that asking for repayment could cause offence or embarrassment. You won’t want the borrower to think you have forgotten the matter, but neither will you want to appear too heavy-handed if they intend to honor the debt, but there is a genuine reason for the delay.
The most important thing is to be completely honest with the person. Have a private conversation with them, remind them of the arrangement, and explain why you now need to be repaid.
If you gave the loan without making any written agreement, it could be that there has been a simple misunderstanding. For example, you might remember setting a particular date for repayment while your friend or relative was under the impression the time limit was more flexible. If this is the case, you can agree new conditions and put them in writing now. Calling in a witness can help to put the arrangement on a more formal level.
If the debtor agrees the money is overdue but says he or she cannot afford to pay the whole sum, perhaps you could offer to accept smaller, regular payments. Try not to get angry, but make sure they understand that this is their problem not yours and they have to solve it. If you suspect poor money management is at the root of their difficulties, you can suggest they seek help to find ways of saving money and get their budget under control. But be careful not to be seen as interfering in their private business.
A more difficult situation arises if you are sure the borrower has the money, but has just decided not to pay. Here, you might consider involving other people. In a family, perhaps you could ask another relative – someone the debtor respects more than you – to ‘have a word’ with them.
With a friend, you might hint about telling other people in your circle that this person cannot be trusted. This could be risky though, as the plan is likely to backfire if your other friends accept the debtor’s version of events rather than yours.
In the end, your decision must depend on the sum involved, the reason you lent it in the first place, and how desperately you need it back. Only you know what price you are willing to pay to keep a particular friendship or family relationship. Whatever the outcome, if you recover your money or not, you will have learned a valuable lesson.