Thinking of Taking a Friend’s Debt to Court? Here’s What You Need to Know about a Money Claim

Your landlord doesn’t want to return your security deposit or you’ve been scammed by a seller – in both situations, the other party doesn’t want to give what they owe you.

After trying every method, and failing, you finally pick the last resort: settle the matter in court and get your hard-earned money back — but at what cost?

A good reason for choosing this course of action is that you might end up feeling empowered from the victory. After all, it is your money and you have all the right to it.

Of course, you would choose to resolve the issue amicably with the other party first, or try to make things work by reaching an agreement – all leading to the hope of getting your money back.

Just like traditional divorce proceedings, money claims are better settled off-court. Whether in business or in marriage, the breaking of an agreement is never easy, and the two estranged parties must close the chapter of their former partnership fully before moving on with their separate lives.

Just like in traditional divorce proceedings, it is better to settle matters off-court

First Thing’s First

The same can be said of making a small money claim. Resort to all means first before you decide to take the matter to court. Don’t make hasty decisions, instead, talk with the other party, asking nicely for what they owe you. Unpaid debts usually don’t end up before a legal expert, especially when there’s only a small sum involved.

If you feel that the time and energy that will be wasted are not worth it, maybe you just need to remind the person of his/her debts.

Send a reminder of debt letter because maybe the borrower just forgot about the due date or the loan altogether, and it’s a move that’s more compassionate than directing the matter to the court without any direct communication.

When the person you reached out to doesn’t budge, you can opt for alternative dispute resolution methods such as mediation, which involves a third party hearing each side. This method is less expensive than traditional court hearings and almost always results in both parties reaching a middle ground.

Going to Court

Gather your proof like unpaid invoices

If you’re sure you want to take this to court, you should be prepared for the entire process. As with any legal fight, you need to compile your evidence, such as pending invoices and agreements, and send a letter to the borrower prior to submitting a claim.

This is mandatory and not doing so may greatly affect your chances in court. Along with the letter, you should also enclose the proofs you have gathered.

If the debtor doesn’t reply within two weeks, then you may proceed with the submission of the application. Depending on the money in question, there will be a fee when you file for a claim.

Moving Forward

After that, it is essentially up to the borrower on what will happen. The accused will be given two weeks to respond to the claim and decide whether they will defend themselves in court or pay off the balance before the matter gets out of hand.

Legal fees may mount if the other party decided to take it to court

If your debtor doesn’t respond within 14 days, a county court judgment will be issued upon your request. This could greatly impact the person or business under accusation because a lawsuit can tarnish their reputation, precisely because it will be attached to their name in public records.

You will also need to issue a CCJ once you win, but it’s still is not a guarantee that the other party will pay up.