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Dealing with deadbeat friends or family members
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Feelings sometimes get frayed the longer a loan remains unpaid.

"To me, a month might seem like just around the corner, but if Kim is waiting for that $100 she lent me, that might seem like a long, long time," says Marsh.

Fortunately, there is a means today to remind an unresponsive borrower of their obligation without creating hard feelings: e-mail. If you made your loan through PayPal, the payment company will remind the borrower on your behalf to pay you back.

"I think an e-mail is nice initially because it's less confrontational," says Izzo. "If you're using PayPal, you can use their great reminder service so they can't pretend they didn't hear you or they forgot."

If your e-solicitations prove futile, a frank exchange may be your only recourse.

"It's not actually rude just to come out and ask them," says Izzo. "The longer you wait, the more you brood, the more resentment builds. I hate to say it, but after two or three times of asking, you may just have a deadbeat on your hands. You might have to write it off, and write off the friendship, and that's what happens. If they don't have the money or they're just unwilling, then what kind of a friend is that?"

Family deadbeats
If a deadbeat friend is bad news, a deadbeat child or sibling can be even worse.

"It's a huge problem, and it happens a lot," says Ruth Hayden, a financial counselor and educator and author of "Your Money Life." "It's a topic that comes up frequently in my office, probably more among family than friends. It's very troublesome because it hurts your relationship. You can't just go and find a new family."

Hayden recently counseled a couple who had been married more than 30 years. The wife learned that the husband had secretly lent money to his brother, who had failed to pay back a previous loan years ago. Suffice it to say the wife was livid.

"There's a secret issue here, a money issue and a family issue. It gets very complex," says Hayden. "We split it up into issues. First, there's the trust issue between the two. We need to solve that first because that's more important than money and more important than the brother."

Hayden says the first test is obvious: Do you have the money -- or, more to the point, could you afford to lose the money?

Then she applies the hesitation test: "Do you absolutely know that this person will pay you back? In the majority of cases, the truth is in their hesitation. Do you absolutely believe this person will pay you back, based on past history? If the answer is hesitation, I encourage them to really think about it."

Next: "... he who lends money to a friend stands to lose both."
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