Loans Between Friends and Family: Why a Written Agreement Matters
“He’d never betray me…” you think. Until he stops picking up your calls. Until he says: “I don’t have it. So what?”
Lending money to someone close often happens spontaneously – without a contract, witnesses, or proof. But these are often the most painful cases. Legally and emotionally.
🔗 Article guide: Full Debt Collection Process
Want to learn about the full debt recovery process? Start here:
👉 Debt Collection – Full Guide
What can you do when a friend or relative doesn’t repay your loan? Is a loan between friends legally binding? Can you sue a friend without a written contract? These are common legal questions. In this article, you’ll learn how to deal with informal loans – and protect yourself without ruining the relationship.
🔎 In this article you’ll learn:
Why informal loans are risky
Common mistakes people make
How to protect your relationship and your money
What to do when a loved one doesn’t repay
Why even family loans need clear terms
1. What is an informal loan?
It’s a verbal agreement – and while valid in theory, it’s very hard to prove in practice. Especially if paid in cash. That makes it vulnerable to:
Denial by the borrower
Lack of evidence
Legal time limits (limitation)
Emotional fallout
2. Typical mistakes
“He’ll repay me eventually.” → Too late, too vague
“I don’t want to insult him with a contract.” → But he might insult you by not paying
“We trust each other.” → Until one of you doesn’t
3. How to protect yourself
Write a simple loan agreement
Use bank transfers with clear purpose
Keep emails, texts, confirmations
Consider a signed repayment schedule
Don’t hesitate to send a formal written notice if needed
4. What if they stop communicating?
Send a written demand with a clear deadline
Gather all evidence (even screenshots)
Offer a written repayment plan
Be mindful of limitation periods (often 3 years)
Contact a lawyer if necessary
⚠️ Real-life example
Jana lent her friend 80,000 CZK to “start a business”. No contract, no proof. The friend disappeared. The court didn’t believe her.
Lesson? Even in friendship – document everything.
✅ Lawyer’s recommendation
Don’t ruin your friendship by avoiding an agreement. It’s better to be slightly awkward now than sorry later. A friendly, signed document can save your relationship – and your money.
And if the loan already went wrong, act fast. Written demands work.
💬 Don’t know what to write to your debtor?
I’ll help you draft a clear, effective and legally strong payment request – something that makes the debtor think twice and works as real evidence.
If the letter fails, I’ll guide you on what to do next. Don’t risk making avoidable mistakes. Reach out.
Contact a legal professional – I specialize in debt collections.
Learn more here.
- Publikováno:
- Naposledy aktualizováno: 15/07/2025
Do you want to know more?
Loans Between Friends and Family: Why a Written Agreement Matters
Print “He’d never betray me…” you think. Until he stops picking up your calls. Until he says: “I don’t have it. So what?”Lending money to