SINGAPORE: A man recently reached out for help on social media after his friend, who had borrowed over S$20,000 from him, cut off all contact.
In a post on Reddit’s ‘Ask Singapore forum, the man shared that he had first lent money to his friend back in 2018 to help him with what were said to be family problems.
Over the years, his friend continued to borrow additional amounts without fully repaying the previous loans, eventually amassing a debt exceeding S$20,000.
Hoping to finally settle the matter, the two friends met just last month to formalize a repayment plan. They drafted and signed an IOU, agreeing on a total amount and setting November 7 as the repayment date.
However, on the agreed day, the man discovered that his friend had blocked him on all communication channels, including WhatsApp, his phone number, and social media.
“I do have his home address, but not sure if it’s real since he gave it to me,” he wrote.
Seeking advice on how to handle this situation and recover his money, the man turned to Reddit to ask if others had faced similar issues and could offer guidance.
He asked, “What can I do with the IOU? How do I proceed from here? Anyone experienced before? Please advise me on how to get back the money.”
“Always lend what you are willing to lose.”
In the comments section, many advised him to avoid lending money if he’s not prepared for the possibility of getting it back. Others offered insights on potential legal options, such as filing a small claims case, to help him recover the money.
One Redditor said, “Rule of thumb: always lend what you are willing to lose. S$20,000 is not a small sum, I know, but be prepared to not see a large portion or even lose everything.
“In the future, when it comes to lending money to friends or even your own family, treat it like it’s a gift to them. Any money returned to you is a bonus, and always lend what you can afford to lose.”
Another commented, “Given the amount, you can take to small claims. You can even try making a police report for fraudulent debtor. I personally had a section mate in BMT investigated and charged for fraudulent debts amounting to less than S$10,000.”
A third shared, “I personally got owed about S$50,000. Police won’t be able to help much. The only way is legal or debt collectors. Since you are aware of his residence, I suggest you go to a debt collector instead. Cheaper and faster.”
How to recover debt owed by a friend
While hiring a debt collector might seem like a good option for recovering debt from a friend, a Singapore law firm, Lions Chambers LLC, warns that there are risks involved.
If the friend refuses to repay the debt and remains uncooperative, some debt collectors may feel pressured to escalate their tactics to compel payment. However, actions such as aggressively banging on the debtor’s door, shouting profanities, and harassing them can quickly cross into illegal behaviour.
Under Singapore law, such intimidation tactics are not only discouraged but can also lead to legal repercussions
For a safer option, consider hiring a lawyer. They can assist by sending a Letter of Demand, which will specify the amount owed and set a deadline for payment.
This letter will serve as a warning to your friend that you’re serious about taking legal action if payment isn’t made. It can also be used as evidence in court that you attempted to settle the matter before resorting to legal action.
For debts of $20,000 or less, your lawyer can assist you in bringing the case to the Small Claims Tribunal. The tribunal can then order your friend to make payments. If they still don’t pay, you may need to take additional legal steps to enforce payment.
For debts exceeding $20,000, the matter becomes a civil claim, and your lawyer would file a writ of summons, requiring your friend to appear in court.
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