Lending can sometimes prove a potentially financially risky business, especially when those you lend to refuse to pay you back. As a lender, you have the right to reclaim the property or money that you loaned to other people.
Though it helps to have a concise and clear contract from the get-go, you can help yourself in other ways, too.
Following the FDCPA
The Federal Reserve discusses collecting unpaid loans. You must first keep in mind the possibility that you will not recover the full amount that you loaned out. However, you can potentially maximize your recouped losses.
First, make sure you go with the fairest methods of reclaiming these lost assets or finances. You must follow the rules set down by the Fair Debt Collection Practices Act (FDCPA), which disallows any form of harassment, misrepresentation, deception or other unfair collection methods.
Fair collection methods
Instead, consider using one of the following:
- Property repossession
- Wage garnishment
- Rent capture
- Collection companies
- Asset litigation
In following the rules and keeping your interactions with the people you wish to collect from as civil as possible, you reduce the potential ammunition they have if they decide to take legal action against you. They will not have much of a leg to stand on as long as you have followed the FDCPA guidelines and pursued only legal avenues of collecting.
However, it is still sometimes complex and difficult to get someone to pay you back. If you are struggling with a particularly difficult case, consider seeking legal help to get you through this battle and gain as much compensation for your lost loan as possible.