Debt recovery problem

With rising costs and increased learning needs, financing our children's education is no longer a simple walk in the park. Discuss with other parents about how they are managing their finances to cope with their expenses.

Debt recovery problem

Postby pinky » Fri Sep 07, 2012 10:06 pm

My husband recently lent $2K to a colleague who told him that he need to pay for his mother's hospital admission deposit. He had promised to pay within a month. There was no written IOU but there were sms that indicated the loan amount and we kept a photocopy of the cheque made out to him. The repayment was delayed a few times and he finally made a cheque to my husband which bounced twice and now promised that he will pay in cash but in 4 instalments. Again the date come and go and he did not pay at all. I have checked the Small claims tribunals website and I think it does not handle personal loan.
If we approach a debt recovery lawyer, how much will it cost? anyone has tried before?
I suggested to my husband to approach the personnel dept and get them to deduct the amt from that guy's salary and pay my husband directly.
Can we force the guy to write an agreement and submit the proposal to the payroll dept?
Any comments or advice is welcome.

pinky
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Re: Debt recovery problem

Postby tutormum » Fri Sep 07, 2012 11:56 pm

No point getting lawyer as the legal fee is not worth it to recover such a small amount. Moreover, you may just get a paper Judgement only - which means the case is in your favour and he is required to repay the loan plus cost. This does not mean that your DH will get his money back. Arrangement can also be made to get his employer to pay your DH monthly by deducting his pay. However, if he defaults, your next option is to make him a bankrupt etc.
Since your DH and he are colleagues, I would suggest that your DH tell him (out of goodwill) that the next course of action is to inform their boss. It will be an embarrassment to the debtor and it may force him to repay the loan cos the whole company may get to know about it.
BTW, is your DH the only colleague who lent him money? Probably he has been borrowing from a few of the colleagues and none of them is wiser.
Once the boss get wind of it, the best approach he will adopt is to deduct from his debtor's salary. This will also close all doors for him to borrow from other colleagues.
I don't mean to sound so cruel but from my experience, compulsive borrowers never repay their loans. Once they think that they can get away from repaying, it'll become a habit to borrow and default. The people who suffer are their family members especially when they end up borrowing from ah long.

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Re: Debt recovery problem

Postby pinky » Sat Sep 08, 2012 9:06 am

thanks tutormum for your advice.
My husband only found out recently that he had borrowed from another colleague but only return the amt after many months. As you mentioned this guy display trait of a compulsive borrower and I will tell my husband to approach the boss about the salary deduction but he wonder if he needs a court/formal order to give to the personnel dept for such an arrangement. Is there a need for a formal authorisation?

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Re: Debt recovery problem

Postby pinky » Sat Sep 08, 2012 9:52 am

tuition_czar wrote:I really hope you get your money back. Your DH shouldn't have lent money to mere acquaintances, let alone parasites.


yup and a big liar :mad: anyway, I told my husband don't wait anymore and discuss with his boss and HR about the deduction on Monday. He said I am 'hiong' and I said he is 'gong' too 'gu-niang' :slapshead:

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Re: Debt recovery problem

Postby pirate » Sun Sep 09, 2012 2:02 am

A good piratey rule of thumb is don't lend money unless you don't expect to see it back. :moneyflies:

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Re: Debt recovery problem

Postby tutormum » Tue Sep 11, 2012 1:55 am

pinky wrote:thanks tutormum for your advice.
My husband only found out recently that he had borrowed from another colleague but only return the amt after many months. As you mentioned this guy display trait of a compulsive borrower and I will tell my husband to approach the boss about the salary deduction but he wonder if he needs a court/formal order to give to the personnel dept for such an arrangement. Is there a need for a formal authorisation?

As long as your DH can prove that he did lend and the debtor admits that he borrowed, the boss will instruct the payroll dept to deduct from his pay. The debtor may be required to sign a letter of authorisation for them to do so. This is also to prove that he did 'receive' his salary but paid to another party. There is no need to go to court.
The only way for him to get out of paying is to resign but I don't think he'll do just that as his rice bowl is at stake. In case it does happen, then the only course of action is to go to court and find out which company he'll be working for.

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Re: Debt recovery problem

Postby Funz » Tue Sep 11, 2012 10:25 am

tutormum wrote:
pinky wrote:thanks tutormum for your advice.
My husband only found out recently that he had borrowed from another colleague but only return the amt after many months. As you mentioned this guy display trait of a compulsive borrower and I will tell my husband to approach the boss about the salary deduction but he wonder if he needs a court/formal order to give to the personnel dept for such an arrangement. Is there a need for a formal authorisation?

As long as your DH can prove that he did lend and the debtor admits that he borrowed, the boss will instruct the payroll dept to deduct from his pay. The debtor may be required to sign a letter of authorisation for them to do so. This is also to prove that he did 'receive' his salary but paid to another party. There is no need to go to court.
The only way for him to get out of paying is to resign but I don't think he'll do just that as his rice bowl is at stake. In case it does happen, then the only course of action is to go to court and find out which company he'll be working for.


Really? That can be done? I am surprised that companies will get involved in something like that. If it is a case of alimony with supporting documents from court yah but lendings between colleagues. Just really surprise.

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Re: Debt recovery problem

Postby MMM » Tue Sep 11, 2012 10:48 am

Funz wrote:
Really? That can be done? I am surprised that companies will get involved in something like that. If it is a case of alimony with supporting documents from court yah but lendings between colleagues. Just really surprise.


Me too. I actually doubt HR will want to get involve in this as it is a private matter between the 2 parties.

But highlighting to the boss might add pressure to the borrower to return especially if he does not want people to know about it.

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Re: Debt recovery problem

Postby alng » Tue Sep 11, 2012 10:51 am

tutormum wrote:As long as your DH can prove that he did lend and the debtor admits that he borrowed, the boss will instruct the payroll dept to deduct from his pay. The debtor may be required to sign a letter of authorisation for them to do so.


So long the debtor authorises the company to pay to the creditor, this can be done. But many companies will avoid this extra administrative work.

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Re: Debt recovery problem

Postby pinky » Wed Sep 12, 2012 1:44 pm

just to update on the matter:
my husband's HR dept did not approve the salary deduction proposal bec this is a personal loan and they do not have such a policy.
I check with some lawyer firm and it cost a few hundred dollars to draft the letter of demand so that may not be feasible.
His colleagues mentioned that this guy was looking around for a night job to supplement his income. Dun know if it's for paying his mother's hospital bills or his own debt.
Nonetheless, I told my husband to observe this guy and remind him of the debt if he really wants his money back. I was pissed off by this guy's false promises about repayment and felt that he could be exploiting my husband's trust and sympathy.
Anyway, still hope to get the money back but just :xedfingers:
If you have other ideas, please share with me and other forummers here.
Thank you.

pinky
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