Personal debt collection is one of the most difficult topics in the debt collection industry. These collection situations almost always exist between friends or family members who used to be close. Many times, their relationships suffer irreparable damage on account of these debts.

If you are currently struggling to collect payments on a personal loan that you gave to a family member or friend, it is easy to understand your frustrations. These types of loans can start out with the best of intentions from both parties. The debtor has every intention of paying the money back, and the creditor is happy to help out on a short term basis.

The trouble arises when the debtor fails to repay the debt in the agreed upon timeframe. This generally places the creditor in a tight spot where they are forced to demand payment from a struggling family member or friend. Sometimes, the delinquent debtor will attempt to guilt the creditor into being more lenient because of their relationship.

If you are in a tough situation regarding a personal loan collection, here are five things you should consider:

The Relationship Has Changed 

When the debtor failed to repay the loan in the time you agreed on, your relationship was forever changed. Many creditors are not willing to accept this change in relationship because they want to remain friends with the debtor, or even worse, they have to sit next to the debtor at Thanksgiving and Christmas Dinner.

As a creditor attempting to collect an unpaid debt, you must divorce yourself of any feelings from your previous relationship with the debtor. They are the ones that have broken the trust of your relationship, you are simply trying to hold them to their word.

Get the Debt Documented 

One of the biggest problems with personal loans is that people don’t bother to document the terms. This can lead to debtors taking liberties with payment amounts and due dates. It can also make the debt very difficult to collect.

If you are considering making a personal loan, be sure to get all of the terms of the loan in writing. If you have already made the loan, you can still get the debtor to sign a document agreeing to the current state of the debt and the plan to resolve it.

Document Payment Requests 

Another issue with personal loans is that payment requests are not always well documented. Rather than simply mentioning the debt in passing, you should make a point to send a written request for payment to the debtor. This request should be sent certified with return receipt so that you can prove that it was sent if need be.

Offer the Debtor a Deal 

Personal loans can cause a lot of bad blood between former friends. One way to put the issue behind you quicker is to simply offer a deal to let the debtor off the hook. That doesn’t mean you have to take a loss, though. Look for the way that the debtor could make good on the amount owed through work or trade.

Hire a Professional 

When all else fails, if you can’t collect the debt on your own, it might be a good idea to call in a professional for their opinion. There are many lawyers and debt collection agencies that are willing to deal with personal loans. They will have the experience to advise you on the best way to handle the debt collection process.

No matter how you choose to handle a personal debt collection, the relationship is almost certain to be forever altered. If you end up taking a loss, you will resent the debtor for that loss. If you force the debtor to pay you, they will likely resent you for it. That is why personal loans are such a difficult issue to deal with.