You lent money to a friend or family member and they haven’t paid you back. Since you thought this was a short-term arrangement — and definitely not a gift — you feel like it’s time to ask for repayment, but you’re stressed about it.
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This is a person you care about, so you don’t want to strain your relationship. However, you need your money back, so you’re willing to initiate this uncomfortable conversation, but you want to do it the right way.
“On many occasions the way we ask for the money to be paid back can be truly detrimental,” said Maryanne Parker, founder of Manor of Manners etiquette consulting.
She said the best way to ask depends on your relationship with the other person, the amount of money owed and the situation.
“If you are lending money to your brother or a sister, you definitely won’t feel uncomfortable asking for the money back — especially if it is an ongoing family situation,” she said. “If we are lending money to someone else, then we can use different techniques without ruining the relationships.”
Having proper communication from the beginning is a must, Parker said. This includes making it clear you’re lending them the money — not giving it to them — and want to be repaid within a specific timeframe.
“On some occasions people get confused or misunderstand the situation — especially if there is known ‘financial superiority,’ when one of the parties is doing better financially because [they have] a better job, career, business and so on,” she said.
She said it’s also important to be understanding because it’s possible the other person is very aware they owe you money but is in a difficult financial situation.
“They might even feel much more uncomfortable than us, just because they are in need,” she said. “Owing money to someone puts us in a very vulnerable situation and if we want to keep the relationships going, we should be understanding.”
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If you haven’t already set dates for repayment — or they’ve come and gone — Parker recommended being flexible with your repayment request.
“Give them an option to repay the money in installments, be specific and negotiate dates in a friendly manner,” she said.
While a popular practice, she advised against putting repayment terms in writing, unless the person owes you a substantial amount of money.
“I do not believe that putting request for money to be repaid in writing will be beneficial for the relationships,” she said. “For smaller amounts, putting the request in writing might be seen as unnecessary, uncomfortable and petty — especially if the person is a close friend.
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However, she said it’s acceptable to do so if the other person insists, as this allows them to show their genuine desire to pay the money back.
When initiating the repayment conversation, Parker said it’s best to be direct. However, since this is a person you care about, she said it’s also wise to assure them you value your relationship.
“Let them know that you need to pay the mortgage or it is your parents’ anniversary and you will need the money soon,” she said.
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Parker said to ask if a specific repayment date works for them. If possible, she recommended trying to come up with a creative solution. For example, you might give them the option to pay the first half of their debt by the first of the month and contribute the rest in some other way.
“Perhaps cooking some of the meals for a family celebration or purchasing the cake and the beverages,” she said. “Again, it depends on the relationships, the amount and the situation.”
No matter what, she said behaving in a demanding, condescending or aggressive manner will definitely ruin your relationship. Conversely, being kind, but firm, will allow you to strike a balance that ensures the other person doesn’t take advantage of you.
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Last updated: July 9, 2021