What is the name of your state (only U.S. law)? Hello everyone, I live in Ohio.
I have a friend who's been really slowly paying off a debt that he's owed to me for over 5 years.
Here's the background. It's early 2008, an "friend" asked to borrow money to buy his wife and engagement ring. He also was in the process of purchasing a new house, and has poor credit. He enticed me into this offer by saying that he would be making lots of money soon and would pay $100 for every month he had the loan out until he paid me back. For some reason, being the fool that I was, I figured he would be paying me back in about 4-6 months, and I would be $600 better off. I took out a loan from BankofAmerica for about $6,000. The worst mistake I've made was not getting a contract/written paper that says he owes me the money.
Over the years, he managed to pay all but about $2,258 of the actual loan money he borrowed (including late fees, Interest, etc). Right now, my wife is getting tired of the BS and wants me to take him to Court. I'm not sure how effective that would be, but I'm certainly considering it. HOwever, I want to make sure I'm fully prepared and have enough evidence to ensure I win. I'm also not sure how I would collect the money.
Here are the facts about the situation.
-He's married with at least 2 children.
-He still claims his credit is too terrible to take out a loan to finish off the payments.
-He's a real estate agent, or designs websites/advertises for Real Estate agents. His constant excuse is; The market is slow, I'm broke/haven't closed a house, but I should be closing one in the upcoming months and have enough to pay you back
-His last payments (both for 2014) were April 29th for $375 and July 23rd for $375. He also paid a regular $115-$125 during the last 5-6 months of 2013. Before that, I don't much on dates of payment, but I kept track as best I could.
-AFAIK, his wife doesn't know and I'm pretty sure he doesn't want her to.
Here's what I have to support any claim that he owes me money.
-I have statements showing I made regular payments to BankofAmerica throughout the period of the loan (the line of credit/loan has been paid off by me)
-I have emails of him saying he's going to pay/admitting he owes me money.
-I have received payments from him via Paypal and I have voided physical check that I didn't cash (money was returned to his account)
Wondering what I should do and if I have enough evidence to support a claim in Small Claims Court. I probably won't be able to collect all of the "personal/verbal" interest he claimed he would give me, but at this point, it would be well over $5,000 in additional debt, and I honestly would feel like a douche, taking that from a man with 2 children who appears to be struggling to make ends meet.
I'd like to negotiate a new contract, reducing the amount of "Verbal" interest he owes me and have him sign it so I have more solid evidence.
I'm considering telling his wife, or threatening to do so. I don't know if that could backfire or be considered unprofessional.
Please help me out, would love to hear your thoughts.
P.s. I can post emails and block out personal information if that would help.
You don't have any written documentation of your loan to him. But if you have e-mails stating that he owes you money and payments that pertain to those debts, then you might be able to establish
a course of performance or course of dealings.
In other words, without a written contract, the court is going to need evidence of your loan. From what you tell me, you will have no problem proving there is a loan. But can you prove the exact contours of the loan?
Can you prove he owes you $6000? What if he argues, I only owe $1500. Then what?
You should also try to keep receiving payments. I would do it by being nice to him. Tell him you could really use some of that money now. Tell him even $100 would be really useful.
Diplomacy is key here. Appeal to him as a friend.
But at the same time, build your evidence against him. A strong detailed record is basically your backup plan.
Also this: >> Before that, I don't much on dates of payment, but I kept track as best I could.
BIG NO NO. If you can't be sure when he paid, then that really makes your credibility look bad. He can argue he did pay. He can argue he paid for more than he did. he can argue you are misrepresenting the size of the loan. He can say you didnt count payments which he remembers.
Diplomacy on the outside. Rational Caution on the inside. Build your case and keep this thing alive. The worst thing is you let years go by and not receive any payments.
First of all, you're not going to get legal advice here. There are a couple lawyers on the forum, but what they tell you still can't be considered legal advice.
Never lend a friend more money than you're willing to lose. This kind of thing happens all the time, and the reality is you don't really have a leg to stand on here. You took out the loan and you have been making the payments - and that's really all that matters. As far as the bank is concerned, you owe that money. Your loan to him in turn is another issue, but without written documentation of the loan terms, you don't really have much. Worse, you've essentially said you were loan sharking him, with that $100 interest per month. You got played and you made a monumentally stupid decision. Plus, since you aren't charging him market loan rates, you may actually end up owing taxes on the loan if you take it to court.
Here is the reality: your friendship is basically over. You've mentally made the switch to being his creditor now, not his friend, and there is really no going back and it'll be very tough to fix that bridge in the relationship now that you've gotten to this point. He's dodging you because he knows he can get away with it and keep putting you off. He has no incentive to finish paying you off anytime soon, and he really has no responsibility to do so. If you look through RLA's archives, there are a few examples of things like this happening - you actually got off pretty easy (in one case, a group of friends opened up a business which failed, but only one of them put their name on all the documents, so the rest got off scott free). You've really been lucky to get any money back from him. Honestly, I think you're better off forgetting the money, and you certainly shouldn't do anything that would jeopardize his payments to you, because without a promissory note or a written deal you don't have much to go on to back it up. If he didn't want to tell his wife before, you have no idea what that situation would create - you may just stop getting any money because she could put a stop to it or he could lie to her about it with the same outcome.
If you want your money back, make the payments something that he really can't claim he can't make. Rather than trying to wring a hundred or three out of him every month or every few months, get what you can from him monthly. Maybe talk to him about a minimum monthly payment of $50, with the expectation that he ups it whenever he can. At the very least you're working towards making your money back.
First of all, you're not going to get legal advice here. There are a couple lawyers on the forum, but what they tell you still can't be considered legal advice.
Never lend a friend more money than you're willing to lose. This kind of thing happens all the time, and the reality is you don't really have a leg to stand on here. You took out the loan and you have been making the payments - and that's really all that matters. As far as the bank is concerned, you owe that money. Your loan to him in turn is another issue, but without written documentation of the loan terms, you don't really have much. Worse, you've essentially said you were loan sharking him, with that $100 interest per month. You got played and you made a monumentally stupid decision. Plus, since you aren't charging him market loan rates, you may actually end up owing taxes on the loan if you take it to court.
Here is the reality: your friendship is basically over. You've mentally made the switch to being his creditor now, not his friend, and there is really no going back and it'll be very tough to fix that bridge in the relationship now that you've gotten to this point. He's dodging you because he knows he can get away with it and keep putting you off. He has no incentive to finish paying you off anytime soon, and he really has no responsibility to do so. If you look through RLA's archives, there are a few examples of things like this happening - you actually got off pretty easy (in one case, a group of friends opened up a business which failed, but only one of them put their name on all the documents, so the rest got off scott free). You've really been lucky to get any money back from him. Honestly, I think you're better off forgetting the money, and you certainly shouldn't do anything that would jeopardize his payments to you, because without a promissory note or a written deal you don't have much to go on to back it up. If he didn't want to tell his wife before, you have no idea what that situation would create - you may just stop getting any money because she could put a stop to it or he could lie to her about it with the same outcome.
If you want your money back, make the payments something that he really can't claim he can't make. Rather than trying to wring a hundred or three out of him every month or every few months, get what you can from him monthly. Maybe talk to him about a minimum monthly payment of $50, with the expectation that he ups it whenever he can. At the very least you're working towards making your money back.
Thanks Jay13x
I understand now it was a monumentally stupid decision. Even back then, my gut reaction was to say NO, which I kick myself everyday for NOT saying that.
However, he said "I will pay you $100 a month until I pay the loan back" and told me about some new enterprise/website he was developing which he was certain would have him rolling in dough in few months. I was enticed by the extra cash I could potentially make, but I honestly didn't except it to be longer than 6 months to a year.
At this point, I'm not worried about the extra money. I didn't realize it was "loan-sharking" if he offered it to me. I definitely don't planning on collecting the entire amount of that (and now that you've mentioned it's loan-sharking, I may not collect any). I was considering just taking $500 or something for all trouble in dealing with this over the past 6 yrs.
Also, I wouldn't really consider him a friend per se. He's an ex-roommate/brother of a friend. So I should probably call him an Old acquaintance.
I'm still trying to arrange a meeting with him to go over the total payments and agree to a final amount that he owes, perhaps even reducing it to entice him to pay me off sooner. That way, if he doesn't pay, at least i have a written document.
Lastly, despite my wife pushing me to take him to court and teach him a lesson, I've been hesitating/holding off for the exact reason of jeopardizing the existing, though slow and sporadic payment structure that we do have going.
I understand now it was a monumentally stupid decision. Even back then, my gut reaction was to say NO, which I kick myself everyday for NOT saying that.
Don't kick yourself too hard. You're a great friend. The problem is, this guy is just an ********. I didn't mean to imply this was entirely your fault - you did make a bad decision, but you were also taken advantage of by a guy who would spin any story to get the money. He could have gone to his parents, to his family - hell, he could have offered to cosign for the loan. But he didn't, because he's a shifty ass.
At this point, I'm not worried about the extra money. I didn't realize it was "loan-sharking" if he offered it to me. I definitely don't planning on collecting the entire amount of that (and now that you've mentioned it's loan-sharking, I may not collect any). I was considering just taking $500 or something for all trouble in dealing with this over the past 6 yrs.
It's not loan-sharking in a legal sense (I'm not even sure that's a thing), I just meant in terms of a deal it wasn't exactly what you'd call standard. 1.6% of the principal isn't a bad rate, but you didn't adjust for reduction of principle.
I'm still trying to arrange a meeting with him to go over the total payments and agree to a final amount that he owes, perhaps even reducing it to entice him to pay me off sooner. That way, if he doesn't pay, at least i have a written document.
Yes, trying to get written confirmation of the terms of your current deal, just in case. But make sure it's only for the current amount. You've already mentioned that you don't really have adequate documentation for the full terms, so renegotiate it with him. I really think something like $50 a month with a percentage of his commissions until his loans are paid off is more than reasonable. If he renegs on this much more reasonable deal, you might want to consider telling his wife, now that you've mentioned that you're not actually friends. There is no friendship to consider anymore, just whether or not he'll pay you off.
I'm still trying to arrange a meeting with him to go over the total payments and agree to a final amount that he owes, perhaps even reducing it to entice him to pay me off sooner. That way, if he doesn't pay, at least i have a written document. Lastly, despite my wife pushing me to take him to court and teach him a lesson, I've been hesitating/holding off for the exact reason of jeopardizing the existing, though slow and sporadic payment structure that we do have going.
It's almost not worth going to court over $2,000, for a variety of reasons. First, just because he legally owes you the money does not mean he will pay you off any faster. You've already mentioned this guy's credit is crap, and credit doesn't get to be crap by someone reliably paying off legal debts. Second, it might cost you just as much in legal fees to fight him if they really get into it.
As you said, she doesn't know and you don't think he wants her to know. Go to her, ask for the remaining money (Just say you're going to get him a gift and you need a boost to get the last bit) and presto.
Gonna lose a friend after that, but you'll get your money back.
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As you said, she doesn't know and you don't think he wants her to know. Go to her, ask for the remaining money (Just say you're going to get him a gift and you need a boost to get the last bit) and presto.
Gonna lose a friend after that, but you'll get your money back.
Secretly disturbing peoples' personal lives by lying to them is not a good way to resolve issues. In this case, it is a doubly bad plan because a family struggling with money issues isn't likely to come up with over two thousand dollars for a mysterious 'gift'. I can't guess at what type of relationship exists in this family, but secretly ******* with it will just about guarantee you'll never see your money.
Keep trying to get payments, even small amounts like Jay13x is suggesting. Given the inconsistent timeline, this guy will not pay you back without prodding, but the fact he has paid back around four thousand is a hopeful sign.
If this is in any way helpful a month after the OP:
I would personally follow (and have personally followed) the advice of Jay13x: "Honestly, I think you're better off forgetting the money." I'd let him know that you consider the debt repaid in full. Then move on.
[I think that the 20% of interest on this note wouldn't be usurious in Ohio - which appears to have max a of 21%.]
I also agree that it's better off that you just forget about it and chalk it up to a poor decision, which you won't make again. Sometimes a good life lesson is worth $2,000-3,000 honestly.
I have been to small claims court 4 times and won 3 times. You can show your evidence and honestly if you do everything right in court, you will probably win. The tough part will be collecting. The judge absolutely won't award you interest, unless you show where your friend signed that he will have to pay interest. So the interest part is definitely out.
(I also don't agree with confronting the wife. The debt is between you and your friend and involving someone else is a way to make things potentially worse. While there's a chance it could work, it's more likely to backfire.)
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I had this same issue over the course of 3 and a half years and a whole lot of resentment, frustration and stress, we don't even talk anymore really but I'm busy with life and didn't have time to "collect" or "chase" for my money back (a bit more than double of yours, helped him with down-payment on house). He always had some story, although we don't talk anymore, I just can't get over my feelings that he would even put me in that situation when I needed it it, I did HIM a favor!! Anyhow, it's all settled now. I used Uomoi.com service auto-caller thing, basically calls people who owe you money on your list with a message to make arrangements with you (you can't put a custom messages lol for obviously reasons I suppose). He runs a landscape company so he can't change his number so I put that number on it and it called him everyday (I think the max is 3 times a day I used the minimum of one) for a couple of months then he started making real arrangements and paid it down. It cost me about $1000 but I wouldn't have got my money back otherwise so it was a steal plus I use it for other "friends" too, that's the cost of doing business I suppose. Good riddance to him and good luck man.
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I have a friend who's been really slowly paying off a debt that he's owed to me for over 5 years.
Here's the background. It's early 2008, an "friend" asked to borrow money to buy his wife and engagement ring. He also was in the process of purchasing a new house, and has poor credit. He enticed me into this offer by saying that he would be making lots of money soon and would pay $100 for every month he had the loan out until he paid me back. For some reason, being the fool that I was, I figured he would be paying me back in about 4-6 months, and I would be $600 better off. I took out a loan from BankofAmerica for about $6,000. The worst mistake I've made was not getting a contract/written paper that says he owes me the money.
Over the years, he managed to pay all but about $2,258 of the actual loan money he borrowed (including late fees, Interest, etc). Right now, my wife is getting tired of the BS and wants me to take him to Court. I'm not sure how effective that would be, but I'm certainly considering it. HOwever, I want to make sure I'm fully prepared and have enough evidence to ensure I win. I'm also not sure how I would collect the money.
Here are the facts about the situation.
-He's married with at least 2 children.
-He still claims his credit is too terrible to take out a loan to finish off the payments.
-He's a real estate agent, or designs websites/advertises for Real Estate agents. His constant excuse is; The market is slow, I'm broke/haven't closed a house, but I should be closing one in the upcoming months and have enough to pay you back
-His last payments (both for 2014) were April 29th for $375 and July 23rd for $375. He also paid a regular $115-$125 during the last 5-6 months of 2013. Before that, I don't much on dates of payment, but I kept track as best I could.
-AFAIK, his wife doesn't know and I'm pretty sure he doesn't want her to.
Here's what I have to support any claim that he owes me money.
-I have statements showing I made regular payments to BankofAmerica throughout the period of the loan (the line of credit/loan has been paid off by me)
-I have emails of him saying he's going to pay/admitting he owes me money.
-I have received payments from him via Paypal and I have voided physical check that I didn't cash (money was returned to his account)
Wondering what I should do and if I have enough evidence to support a claim in Small Claims Court. I probably won't be able to collect all of the "personal/verbal" interest he claimed he would give me, but at this point, it would be well over $5,000 in additional debt, and I honestly would feel like a douche, taking that from a man with 2 children who appears to be struggling to make ends meet.
I'd like to negotiate a new contract, reducing the amount of "Verbal" interest he owes me and have him sign it so I have more solid evidence.
I'm considering telling his wife, or threatening to do so. I don't know if that could backfire or be considered unprofessional.
Please help me out, would love to hear your thoughts.
P.s. I can post emails and block out personal information if that would help.
http://forums.mtgsalvation.com/showthread.php?t=409478
a course of performance or course of dealings.
In other words, without a written contract, the court is going to need evidence of your loan. From what you tell me, you will have no problem proving there is a loan. But can you prove the exact contours of the loan?
Can you prove he owes you $6000? What if he argues, I only owe $1500. Then what?
You should also try to keep receiving payments. I would do it by being nice to him. Tell him you could really use some of that money now. Tell him even $100 would be really useful.
Diplomacy is key here. Appeal to him as a friend.
But at the same time, build your evidence against him. A strong detailed record is basically your backup plan.
Also this:
>> Before that, I don't much on dates of payment, but I kept track as best I could.
BIG NO NO. If you can't be sure when he paid, then that really makes your credibility look bad. He can argue he did pay. He can argue he paid for more than he did. he can argue you are misrepresenting the size of the loan. He can say you didnt count payments which he remembers.
Diplomacy on the outside. Rational Caution on the inside. Build your case and keep this thing alive. The worst thing is you let years go by and not receive any payments.
Never lend a friend more money than you're willing to lose. This kind of thing happens all the time, and the reality is you don't really have a leg to stand on here. You took out the loan and you have been making the payments - and that's really all that matters. As far as the bank is concerned, you owe that money. Your loan to him in turn is another issue, but without written documentation of the loan terms, you don't really have much. Worse, you've essentially said you were loan sharking him, with that $100 interest per month. You got played and you made a monumentally stupid decision. Plus, since you aren't charging him market loan rates, you may actually end up owing taxes on the loan if you take it to court.
Here is the reality: your friendship is basically over. You've mentally made the switch to being his creditor now, not his friend, and there is really no going back and it'll be very tough to fix that bridge in the relationship now that you've gotten to this point. He's dodging you because he knows he can get away with it and keep putting you off. He has no incentive to finish paying you off anytime soon, and he really has no responsibility to do so. If you look through RLA's archives, there are a few examples of things like this happening - you actually got off pretty easy (in one case, a group of friends opened up a business which failed, but only one of them put their name on all the documents, so the rest got off scott free). You've really been lucky to get any money back from him. Honestly, I think you're better off forgetting the money, and you certainly shouldn't do anything that would jeopardize his payments to you, because without a promissory note or a written deal you don't have much to go on to back it up. If he didn't want to tell his wife before, you have no idea what that situation would create - you may just stop getting any money because she could put a stop to it or he could lie to her about it with the same outcome.
If you want your money back, make the payments something that he really can't claim he can't make. Rather than trying to wring a hundred or three out of him every month or every few months, get what you can from him monthly. Maybe talk to him about a minimum monthly payment of $50, with the expectation that he ups it whenever he can. At the very least you're working towards making your money back.
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Thanks Jay13x
I understand now it was a monumentally stupid decision. Even back then, my gut reaction was to say NO, which I kick myself everyday for NOT saying that.
However, he said "I will pay you $100 a month until I pay the loan back" and told me about some new enterprise/website he was developing which he was certain would have him rolling in dough in few months. I was enticed by the extra cash I could potentially make, but I honestly didn't except it to be longer than 6 months to a year.
At this point, I'm not worried about the extra money. I didn't realize it was "loan-sharking" if he offered it to me. I definitely don't planning on collecting the entire amount of that (and now that you've mentioned it's loan-sharking, I may not collect any). I was considering just taking $500 or something for all trouble in dealing with this over the past 6 yrs.
Also, I wouldn't really consider him a friend per se. He's an ex-roommate/brother of a friend. So I should probably call him an Old acquaintance.
I'm still trying to arrange a meeting with him to go over the total payments and agree to a final amount that he owes, perhaps even reducing it to entice him to pay me off sooner. That way, if he doesn't pay, at least i have a written document.
Lastly, despite my wife pushing me to take him to court and teach him a lesson, I've been hesitating/holding off for the exact reason of jeopardizing the existing, though slow and sporadic payment structure that we do have going.
http://forums.mtgsalvation.com/showthread.php?t=409478
It's not loan-sharking in a legal sense (I'm not even sure that's a thing), I just meant in terms of a deal it wasn't exactly what you'd call standard. 1.6% of the principal isn't a bad rate, but you didn't adjust for reduction of principle.
Yes, trying to get written confirmation of the terms of your current deal, just in case. But make sure it's only for the current amount. You've already mentioned that you don't really have adequate documentation for the full terms, so renegotiate it with him. I really think something like $50 a month with a percentage of his commissions until his loans are paid off is more than reasonable. If he renegs on this much more reasonable deal, you might want to consider telling his wife, now that you've mentioned that you're not actually friends. There is no friendship to consider anymore, just whether or not he'll pay you off.
It's almost not worth going to court over $2,000, for a variety of reasons. First, just because he legally owes you the money does not mean he will pay you off any faster. You've already mentioned this guy's credit is crap, and credit doesn't get to be crap by someone reliably paying off legal debts. Second, it might cost you just as much in legal fees to fight him if they really get into it.
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As you said, she doesn't know and you don't think he wants her to know. Go to her, ask for the remaining money (Just say you're going to get him a gift and you need a boost to get the last bit) and presto.
Gonna lose a friend after that, but you'll get your money back.
Keep trying to get payments, even small amounts like Jay13x is suggesting. Given the inconsistent timeline, this guy will not pay you back without prodding, but the fact he has paid back around four thousand is a hopeful sign.
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I would personally follow (and have personally followed) the advice of Jay13x: "Honestly, I think you're better off forgetting the money." I'd let him know that you consider the debt repaid in full. Then move on.
[I think that the 20% of interest on this note wouldn't be usurious in Ohio - which appears to have max a of 21%.]
I have been to small claims court 4 times and won 3 times. You can show your evidence and honestly if you do everything right in court, you will probably win. The tough part will be collecting. The judge absolutely won't award you interest, unless you show where your friend signed that he will have to pay interest. So the interest part is definitely out.
(I also don't agree with confronting the wife. The debt is between you and your friend and involving someone else is a way to make things potentially worse. While there's a chance it could work, it's more likely to backfire.)
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Norin the Wary, Grimgrin, Adun Oakenshield (taking forever to build)(dead format for me)