What to Do When Someone Owes You Money: A Step-by-Step Guide

You lent money in good faith, and now the repayment date has passed. It's a frustrating situation, but there are constructive steps you can take to recover what you're owed without burning bridges.

Step 1: Send a Friendly Reminder — People genuinely forget. Start with a casual, non-confrontational message. Something like "Hey, just a quick reminder about the $200 from January — let me know when works for you!" A shareable link from NowTo IOU can serve as a gentle nudge.

Step 2: Follow Up in Writing — If a verbal reminder didn't work, put it in writing. A text or email creates a record and shows you're serious. Keep the tone polite but clear about the amount and original terms.

Step 3: Suggest a Payment Plan — If the person is struggling financially, offer to break the debt into smaller payments. This shows empathy and makes repayment more manageable. Use NowTo IOU's partial payment feature to track each installment.

Step 4: Set a Firm Deadline — If gentle approaches fail, set a clear deadline. "I need the money back by March 15" gives a specific date to work toward. Put it in writing.

Step 5: Involve a Mutual Friend — Sometimes a third party can mediate. A mutual friend may help the other person understand the urgency without making it feel like a personal attack.

Step 6: Consider the Legal Route — For significant amounts, small claims court is an option. You'll need evidence of the debt — this is where your NowTo IOU records become invaluable. Screenshots, shared links, and payment history all serve as documentation.

Prevention Is Key — The best strategy is to prevent this situation altogether. Always record debts digitally when they're created, set clear repayment terms, and use tools like NowTo IOU to maintain transparency from day one.