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💸 You lent money under an IOU, but the debtor won’t repay: what to do?
A subscriber asked our chatbot the following question:
“I lent money to an acquaintance; he wrote an IOU and promised to return the funds by a specified date. The deadline has already passed, but he’s not returning the money. He keeps promising to pay later. How can I get my money back?”
An IOU can be important evidence of the existence of a loan agreement and the fact that funds were handed over to the borrower. If the repayment date has arrived and the money has not been returned, the lender has the right to demand performance of the obligation.
❓ What to do if the debt is not repaid?
▪️ Send the debtor a written demand for repayment.
▪️ If the debt is not repaid voluntarily after receiving the written demand, you can go to court with a claim to recover the debt.
▪️ After obtaining a court decision you can obtain an enforcement document.
▪️ Apply to a state or private enforcement officer to open enforcement proceedings.
🔻 What to do if the debtor ignores demands?
💁♂️ We recommend:
▫️ Keep the original IOU.
▫️ Gather all evidence of the transfer of funds and correspondence with the debtor.
▫️ Check whether the repayment date specified in the IOU has arrived.
▫️ Send the debtor a written demand for repayment.
▫️ Preserve evidence of sending and receipt of the demand.
▫️ If the funds are not returned, file a lawsuit to recover the debt.
▫️ After the court decision becomes legally binding, obtain an enforcement document.
▫️ Apply to a state or private enforcement officer for compulsory enforcement of the decision.
🔨 What happens at the enforcement stage?
The enforcement officer may apply the coercive measures provided by law, in particular to seize the debtor’s funds and assets.
✅Important: the mere existence of an IOU does not mean the money will automatically be returned. If the debtor refuses to fulfill their obligations voluntarily, it is important to properly document the demand and timely go to court. The Supreme Court has repeatedly emphasized the evidentiary significance of an IOU in disputes over loan repayment.
💁♂️ If you have questions or need additional consultation, contact our chatbot or email us at [email protected].
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