Over the past five years I have loaned money to my friend at different times. She has a job but can never get on top of things. She has a little daughter so I have always helped out where I can so that the daughter does not have to suffer. I have helped her with bills and fixing her car. She always says she will pay me back but never does. I did not realise how much it added up to. She says she cannot pay me but I really need that money myself. Should I take her to court to get the money back?
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Answer by Lisa Wulfsohn, Melbourne 3000 VIC
- Before going to court it is a good idea to try and resolve the problem yourselves. Lawyers and court fees can add up and could end up costing you a lot of money.
- You may also want to try taking some other steps first if you want to maintain the friendship.
- You could try talking to her about it or writing a letter laying out how much she owes and why you really need the money.
- You could suggest a payment plan as a way to get the money back without needing to go to court.
- There are other options before going to court such as:
- writing a letter of demand; or
- going to mediation.
- You can write a letter of demand stating when the money must be paid back and the action you will take if it is not paid back at that time.
- You can do this yourself or ask a lawyer to write it on your behalf.
- Sometimes getting a formal letter from a lawyer encourages people to act.
- If your friend agrees you can go to mediation to try to resolve the matter.
- This is a more cost effective option that going to court.
- An independent mediator may be able to help you both come to an agreement about the debt.
- If these options do not work then you may wish to investigate commencing court proceedings. At this point in may be a good idea to speak to a lawyer so that you get a good idea about the strength or your claim and an estimate about the costs of running a civil case.