When a friend borrowed money and won’t pay back what they owe, you can still recover it through the courts, usually by filing in small claims court for smaller amounts or a civil lawsuit for larger ones. Mediation or arbitration may work if your friend is willing to cooperate. Whichever route you choose, you’ll need proof the loan existed, and you’ll need to file before your state’s deadline runs out.
Prove the Loan Actually Existed
Your case rises or falls on evidence. A written agreement is the strongest proof because it shows the amount, the repayment schedule, and any late fees you both agreed to. If you have one, keep the original safe and make copies.
Verbal loans are also legally binding in many places, but proving them is harder because it comes down to memory. To make a verbal agreement stick, you generally need supporting evidence: text messages discussing the loan, emails, bank transfer records, or a witness who heard the conversation. Partial payments your friend already made can also help demonstrate that a loan existed in the first place.
One boundary worth knowing: under the Statute of Frauds, some contracts must be in writing to be enforceable at all, and the specifics vary by state. Even a short written note about a significant loan protects you.
Small Claims Court
Small claims court is the usual path for recovering money from a friend, and it’s designed to work without a lawyer. Each state sets its own dollar cap on what you can sue for there, so check your local court’s limit before filing.
You start by filing a claim form and paying a filing fee, which varies by court. The court then schedules a hearing where you present your evidence: bank statements, texts, the written agreement, records of partial payments. Judges often rule quickly, sometimes the same day. You can hire a lawyer if you want one, but most people don’t.
Civil Lawsuit for Larger Amounts
If what you’re owed exceeds the small claims cap, a formal civil lawsuit is the next step. This is more procedural, and most people hire an attorney. The case begins when you file a complaint laying out the facts and the legal basis for repayment.
Before trial, both sides exchange documents and take statements during discovery, and many cases settle at this stage to avoid the cost of trial. Civil lawsuits can drag on for months or years, so weigh the amount owed against likely legal fees before committing.
Mediation or Arbitration
If your friendship matters and your friend is willing to talk, mediation or arbitration can resolve the debt without a courtroom fight. In mediation, a neutral third party helps the two of you reach an agreement, but doesn’t decide anything for you. In arbitration, an arbitrator hears both sides and issues a decision, and a court can generally confirm and enforce that decision as a final judgment.1Office of the Law Revision Counsel. 9 U.S.C. § 9
Both options need your friend’s cooperation. If they refuse to participate, court is your only remaining option.
Don’t Wait Too Long to File
Every state sets a statute of limitations for suing over an unpaid loan, and it usually differs depending on whether your agreement was written or verbal. The clock generally starts on the date repayment was due. Miss that window and you lose the right to sue at all, so if your friend has gone quiet, act rather than wait.
Collecting After You Win
Winning in court gets you a judgment, not a check. If your friend still refuses to pay, you’ll need to use collection tools, most of which are governed by state procedure:2Office of the Law Revision Counsel. 15 U.S.C. § 16723Office of the Law Revision Counsel. 15 U.S.C. § 16734Office of the Law Revision Counsel. 42 U.S.C. § 407
- Wage garnishment, where the debtor’s employer withholds part of their paycheck. Federal law generally caps this at 25% of disposable earnings.
- A property lien, which attaches to real estate the debtor owns and makes it hard to sell or refinance without paying you first.
- A bank levy, which pulls funds directly from the debtor’s account. Certain funds, such as Social Security benefits, are federally protected from levy.
Collection can take persistence, but a valid judgment gives you leverage that an unpaid personal loan alone never does.