What's your policy on writing stories based on incidents that happen to people in your life? Or stories that people in your life tell you about their friends or relatives? Or stories where a character is clearly Aunt Harriet or Uncle Bob? If you know they'll never see it does it change things?
Where do you draw the line? What's the proper protocol here?

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A few years ago I was reading some how-to-write book, and found a quotation from some well-known woman writer (I mention that the writer was a woman solely in an attempt to jog memories). Don't have time to search for the exact quote, but basically she said, "I'd reveal the darkest secrets of my sainted mother's sex life if I could get a good chapter out of it."

Personally, I draw the line somewhere short of that. Not too short, however.
Everything is fodder for a story, but nothing is used directly. I'll tuck it away and let it ferment. By the time I use the incident it won't be recognizable. It won't be Aunt Harriet or Uncle Bob.
For me, there is no one solid policy. I have never taken a completely real person and inserted them in fiction, only changing their name. There may be aspects of a person, or more specifically my relationship to them, that I might put in a story. For example, it's no secret to anyone I don't have a relationship with my father. I have written a few characters where there are serious problems or even no communication normally between the character and a parent, but that character is never me. It's a similar dynamic, but even then, it's different because the people are different.

You have to be very careful because you could open the door to a lawsuit. I know a few authors who've been threatened with them, but things didn't go any further. If something is inspired by a true event then put the disclaimer but for me, I change enough so that there's no automatic translation between the actual event and my work.

My one Canadian ms was based loosely on the 'Highway of Tears', which is a stretch of highway in BC where a lot of girls have gone missing over the years, usually without a trace of them to be found. The ms was written as a bit of a 'what if' to find a solution to where those girls were going, but I didn't play up that link or make it obvious. All my 'victims' were ficticious and in no way based off those women.
Obviously it is very hard to let some stories slip away-just too good. Or some people--just too interesting. Usually it is possible to mask it and funnily enough sometimes a completed invented characters is thought to be a real person.
I JUST mentioned this subject in this online mystery writing workshop I'm taking. We were asked by our instructor where we get our ideas, and most of mine either come from people I know well or in passing, and from stories I've heard about people who are acquainted with people I know. Some of them have lives that would make terrific fiction. Without needing to exaggerate a single thing! But I would only use snippets from their lives in a story because I would not want to embarrass them if they recognized themselves, first of all, and secondly, some of them are nuts - the possibilities of what they might do if they recognized themselves kind of scare me. From a legal standpoint, yes (trying to sue me for writing an unauthorized biography), but also from a "please don't burn down my house for making the details of your freaky life public" standpoint. Yeah, not kidding here.

So as an alternative, I use one or two aspects of their lives and then fill in the rest with my imagination.
I'm sorry, but I consider just about everything grist for this writer's mill, even though most stories need a little fudging to appear plausible even if they're true. What you want is the essence of the event or the individual, not what exactly was said or done or whatever. I have often had those this has got to go in a book somewhere moments--events or situations too rich to leave alone.

What I have found more interesting is people swearing I've developed a character around them, when I wasn't thinking about them at all. My younger sister swore that the heroine in my last RS was based on her and I was like huh? The funniest was when my first book came out. I needed names for two women who were sisters. I "borrowed" the names of two friends of the family who happened to be sisters. I had intended these to be cameo roles, but both got meatier and one sister came off the worse for wear. There was a family wedding and I was dreading seeing this woman knowing she'd read the book and feeling the need to explain why I'd used her name.

Turns out I shouldn't have worried. She was convinced this character was her and nothing I could say would dissuade her from this honor--especially since the man I paired her with in the story bore the same name as a man she used to date in real life (whom I was too young to remember, mind you). I never tried to convince anyone else that I wasn't writing about them again--but more often than not, I wasn't.
The most annoying thing is when people think you are writing about yourself--assuming you only have your own story to tell. And assuming your own story is interesting.
I am more likely to borrow incidents to fill out a story--seldom using it as the main plot. Still since I've only written stories until now, I've never needed as much material as a novelist.
A few years ago I co-wrote a book of short stories that all took place on the set of a movie in production. My co-author and I had both worked on a bunch of movies. A lot of the things that happened - and quite a few of the characters - were based on things that happened to us and people we worked with. Some of the characters were not always nice.

When the book was published and people we'd worked with read it, they always thought the unpleasant characters were people we knew, but almost everyone thought they were someone different. Pretty much no one recognized themselves (which, I think in my case, was more due to my poor writing than any decision I made to not use the people I knew).

Now evertything I see and hear is material.
That's it! I'm not sharing my stories with you anymore!

(Did you see the outcome of that story I sent you the other day? I'll be looking for that in a future book John!)
Anything is fair game, although it's generally sufficiently changed (names, details) to avoid detection. Some things are just too damn good to pass up. I also note down turns of phrase/snippets of dialogue that might be useful: my aunt's very pregnant neightbour some years back was seduced into labour; my comment at the time went down like a damp squid.
Yeaaaap. Anything's fair game to me. I'd probably pull-short of character-assassinating someone real, but that would have more to do with a cowardly fear of legal or personal ramifications than any moral qualms.

I think that sort of "complete character" transplantation very rarely occurs anyway. Speaking personally, I'm far more likely to create a character based upon a set of plotted principals, then give them taints and tinges based upon one or several real people of my acquaintence, than simply dump someone fully formed out of reality into the fiction.

The same's true of the things a character does. It's always a balancing act between a character performing (in-character) in a way that the plot requires, and extraneous actions based on real-life stuff you've seen or done. The outcome is that a lot of anecdotes and adventures I've picked-up (rarely whilst sober) over the years find their way into my novels, usually being performed by characters who bear little or no relation to the "real" person involved.

One of my favourites involves a mate of mine who works as a fork-lift truck operator. He's a prodigious pothead (to the extent that his foreman permits him to smoke whilst at work, knowing that nothing will get done otherwise - it's all joyously unscrupulous and illegal). One day he was so baked at the end of the working day that he knew there was no way he could drive home in his car without either crashing or getting nicked by the cops. So, applying his fuzzy and oh-so-impaired logic, he came up with the perfect solution: he'd use the fork-lift to pick up his car, and carry it home instead.

He got halfway out of the warehouse carpark before the forklift toppled over forwards, unable to bear the weight of a ford fiesta. True story.

There's no way I'm going to overhear something like that and not find a way to get it into the novel - even though the character involved is absolutely nothing like my mate whatsoever.
No way you can pass that kind of tale up.

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