Yes, we are all in this together, and we need to be kind and lenient with each other, but it is not greedy to ask for your money if someone owes you; especially if you need it.
At this point in the pandemic, nine times out of 10 the reason you haven’t got your money is because the person or business legitimately can’t afford to give it to you. But clearly documented creative alternative solutions can sometimes fix this problem. Here are a few tips to help get your money back.
Agree to a flexible payment plan
Get on the same page about the person’s or business’s timeline to have the money, then offer up a more flexible payment schedule such as three monthly instalments of $250. Chances are that a little more time will prevent you from losing money and help the borrower get back on their feet. To be clear, this solution does not require you to reduce, or eliminate, the debt, which could be very bad for your finances. It’s an extension.
Now might be the perfect opportunity to barter services
Does your debtor have a skill or service that could be of value to you? Painting, safe child-minding, meal preparation, gardening, photography, digital storefront setup, chiropractic treatments and such. Could a swap of services, rather than payment, resolve the debt? Typically this works well if the debt is on the smallish side, but I’ve seen it work when the money owed is in the thousands, too; a few months rent in exchange for a clearly scoped home improvement, for example. Note that this solution only works if you can afford to go without the cash.
Exchange something of value
Taking “collateral” up front when lending money is a common practice because it protects the lender from nonpayment. But, you can still ask for it after the fact. If both parties agree, this is a straightforward trade. For example, a motorcycle in exchange for an $8,000 debt, or a gently used MacBook in exchange for a $1,500 debt. Once the ownership is transferred to you, you can decide what to do next; sell it on Facebook Marketplace or Kijiji, keep it for your personal use or trade it.
Negotiate a reasonable time for your vendors to honour your deposit or credit
Deposits for events are tricky because they are typically non-refundable. But if the coronavirus has delayed your wedding, retirement party or other large event, most businesses will allow you to rebook for a future date, thus using your deposit. The same goes for credits — flight credits, pre-booked services like monthly waxing or gym memberships — all of these should be honoured at a future date.
The challenge here is whether the vendor with whom you have the deposit or credit has the staying power to make it through the pandemic and still honour their commitment to you. My advice is to keep in contact with them, and if it’s looking like they might be headed for bankruptcy see what you can do to negotiate getting your money back … before they close their doors.
Sometimes less is better than none
I’m not a huge proponent of reducing the value of the debt, but sometimes you have to, to get at least some money back. Let this be a last resort option. Don’t offer it up until all else has failed.
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When you’re dealing with debt, vagueness is a recipe for small claims court. So if you want to keep the relationship healthy with your tenant, customer, small business or friend who owes you, you’ll need to remove all emotion and negotiate clear win-win solutions.
In the rare instance, nonpayment is malicious. A good example would be the improper withholding of child support. Or theft. In these cases, do not delay in seeking legal counsel or bring it to the attention of authorities.