Friday, 17 February 2017

The Voice - Consumer's Voice

Can I get the money back?

I need your help. I borrowed someone some money last year, about P300 with an interest rate of 30℅ a month. The person promised to pay it in a month and I haven't received it to this day.

Please suggest a course of action for me because I have lost hope I will get the money back.

I hope you and the other person signed a written agreement about this loan because if you didn’t it might be difficult to prove that the loan ever happened. You might find that text messages will be good enough for a court but a signed, dated and witnessed agreement would be best. If you want to proceed against the other person you should consider writing them a letter giving them fourteen days to repay you the P300 they owe you. If they don’t pay you within that time you can then go directly to the Small Claims Court and seek an order against them.

Notice that I said P300, not P300 plus interest. The bad news is that you’re not entitled to that interest unless you were a micro-lender registered with NBFIRA, the Non Bank Financial Institutions Regulatory Authority when you made the loan. Were you? The worse news is that you might end up in trouble for even making the loan with interest.

Maybe you should ask yourself whether the chance of getting your P300 back is worth the bother of NBFIRA becoming interested in you?

Must I pay the debt collector?

I had borrowed money from a friend with a written agreement. I have the records that I have paid P3,200 and my balance was just P600. The person I owe engaged deputy sheriffs to get the outstanding balance and I paid through court. As we speak the money is there at the court for him to collect but he is now telling me to pay the deputy sheriff after I paid the money. Do I have to pay them or he is the one who is suppose to pay cause he is the one who consulted them? Your help will be appreciated.

Unfortunately, this might be a situation where you regret signing that agreement because it gave your friend all the evidence he needed in a court to get an order against you to recover the arrears you owed. I assume that the friend took you to court because you were in serious arrears? It was only P600 but I imagine you had owed it for a long time if he had to go that far to get his money back.

Regarding the payment to the debt collector, yes, I suspect you will have to pay their fees. Your friend clearly wasn’t getting the money you owed him back so he had to escalate things to court and then to a debt collector once he got an order against you. It wasn’t really his choice to incur those costs, it was your failure to repay the debt that forced him to do so. I don’t think it’s fair for him to be further disadvantaged in that way, do you?

I suggest you pay the costs as soon as possible before they escalate even further.

The lesson here is about lending money to friends. I suggest that whenever you lend money to a friend you either need to forget about the friendship or instead to treat the loan as a gift. Expect not to see either the money or the friendship again.

Today’s lesson

Both of these questions have something in common: getting things in writing. One did, the other didn’t. The lesson is simple. If you want commitment, get something in writing because then you’ll have evidence you can use to enforce the commitment. On the other hand, if you can’t commit, don’t sign anything because the commitment will come back and bite you.

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