You might think that in the current economic climate it is better to be the creditor than the debtor. However, in certain situations, this wouldn’t necessarily be the case. In theory, as long as the person owing you is paying the money back as agreed and they remain traceable and contactable, all is well. But what happens when the debtor breaks their loan agreement? Depending on who they are, you may find your hands tied. Below are a list of the four worst kinds of people to have owing you money.
1: Mob Bosses
This one is fairly self-explanatory. Mob bosses are very dangerous people. If you go and ask them for money, there is a good chance you might not return home again. We highly recommend you avoid lending to mob bosses, unless of course you are one yourself, in which case you will need to weight up the risks and rewards on your own! In this case, I suspect that you already have your own financial adviser who could discuss this with you further.
2: Tax Authorities
No matter where you live, tax authorities work on the same double standard. While they are all very happy to accept your money (and quick to remind you if you do not pay on time), the same is generally untrue for the reverse. If you find yourself in credit with your local tax authority, you could end up waiting a long time to be reimbursed. Tax authorities are notorious for this, as well as for the excessive paperwork usually required to wade through in order to claim your refund.
3: Crazy Dictators
Unless you plan on writing off the loan as a contribution to their political campaign, crazy dictators are not recommended debtors for two main reasons. Firstly, they are likely to be unreasonable and difficult to negotiate repayment with (the ‘crazy’ part being something of a red flag in this case). Secondly, a successful dictator will have their own country, armed forces and laws, all of whom will be firmly on their side making this a pointless (and dangerous) debt to pursue.
4: The Very Rich
You might think that lending money to the very rich would be no problem – after all, surely they can afford to pay you back quickly? Unfortunately, this isn’t always the case. They also have the money and connections to run from their debts, and perhaps even have friends who rule their own country who will offer asylum (see ‘crazy dictators’ above). Princess Maha Al-Sudairi of Saudi Arabia is being chased by the luxury Shangri-La Hotel in Paris for a £5 million bill only a few years after she claimed diplomatic immunity in Paris to avoid £15 million of unpaid shopping bills.
While the light-hearted examples above illustrate some of the potential pitfalls of lending money to people, the bottom line is that you always run some risk of your debtor defaulting no matter who your customer is. While it is always best to be as thorough as possible in checking things like affordability and reliability, unfortunately you cannot predict every outcome.
Recovering unpaid funds yourself can be stressful, time-consuming and potentially very messy, so it is often a job best referred to professionals. A reputable debt collection agency can be invaluable in this situation. Outsourcing unpaid loans to an agency will mean that you won’t have to deal with the defaulter personally (especially important if they fall into one of the above categories!) and that you can be sure that the case is being handled within the law by someone with the appropriate knowledge.
Written by: Given a placement at one of the largest accountancy firms in the world immediately after university, Shannon James then went on to found a company and started investing in property. This has given him an unwelcome amount of experience at chasing up on delinquent debts and ensuring consistent, positive cash flow.
The 4 Worst People to Have Owing You Money
