I loaned the kids a bit less than 10k to pay off a bad debt.
They are in the midst of a divorce.
Soon to be ex-son-in-law refuses to consider the loan ‘his’ responsibility even though the divorce says so.
Can I sue him in small claims court for his half?
Is talking to a lawyer needed since this is part and parcel of a divorce proceeding?
Judge Judy wouldn’t be happy about you only requiring payment from the XSIL, and not likely to believe that your daughter ever actually paid you. Don’t know about real courts or how the law reads on that. Good luck. Better for you (and daughter) to learn from the experience than to get the money back (I know it doesn’t feel that way).
I believe the amount you mention is way above what you can win in small claims. A lawyer should be along to tell you.
Moved from General Questions to IMHO.
We’ve decided that real life legal/medical questions get moved to IMHO, where any idiot on the internet can give you their opinion. Take it for what it’s worth.
samclem Moderator
Whether the daughter paid her or not should be immaterial if she’s only asking for half the loan amount from the SIL. ISTM that if none of the loan’s been repaid, she should be able to ask for half from the SIL.
IANAL (or even very smart).
If you’re considering small claims then by its nature you are probably considering action without counsel (not a problem.) You need to use Google and type in “[state] small claims information” and find out the specifics about small claims in your state.
While the normal reaction to any question is “see a lawyer” by its nature most small claims actions are for people who are talking about an amount of money that is probably not worth utilizing the services of counsel. [As a total aside I will mention that for some entities such as businesses even matters involving only small amounts of money are usually worth going through a lawyer just because there are procedural mistakes you can make that could be very costly–for example if you’re evicting someone, at the very least you need to have some legal services to help you create an eviction protocol even if you do not use a lawyer for every eviction.]
I’m assuming you loaned your daughter and SIL $10,000 and are expected him to pay you $5,000 compensation? If the terms of the divorce state that all debts were divided equally, or specifically state that debt was divided equally, then you can proceed with a small claims suit. If you’re unsure on this you should probably double check the terms of your daughters divorce and make sure she did not get anything in the divorce to offset her ex-husband’s share of the loan.
At $5,000 that is at the maximum in my state for small claims court, it could be over the maximum in your state. I think some states small claims may go up to $25,000–that is why you need to check. My state has a PDF right on a government website that explains all the details about small claims court.
If you go to small claims court here is what will happen:
Typically by going to small claims court you must also recognize you have given up many rights as a plaintiff, and very often you also have to agree that the decision of the small claims court is binding so if you do not like what happens you will have great difficulty in appealing it to a “proper court” with a real judge/jury. This is a trade off because you also have far less skin in the game in a small claims court since it costs less to file and is far cheaper to go through the procedures.
The person hearing the case will typically make his decision right then and there. These are not big issues for him and he will settle many such cases in a day.
If he rules in your favor your SIL will be required to make payment within a certain amount of time. In cases I’m familiar with they will bring a cashier’s check down to the court to make payment, usually you are also entitled to some amount of interest on the amount of judgment for every day after the date of the judgment–in most cases it will be a few pennies interest if they pay within the allotted time.
If your SIL does not make the payment then 25 sheriffs deputies will storm his house and arrest him, and he will have to work in forced labor camp earning $0.55/hr until he has earned enough money to pay you back.
That’s a joke! And now you find out the thing about small claims court that upsets many people when they have found out about it for the first time. In truth all that winning small claims court gets you is a judgment against that person. The court has no real skin in the matter and is not required to materially help you collect your judgment. Your SIL can’t be held in contempt or fined for not paying you, he won’t get arrested for it. You’re essentially in the same situation as a bank trying to collect money from someone who maxed out a credit card and then refuses to make payments on it.
Many people think because they went to a court and got a judgment that all kinds of enforcement mechanisms suddenly and magically kick into action, that is not the case. If the person does not wish to pay you will have to essentially work at enforcing this for a very long period of time and expend a great deal of your time and money doing so.
Some things you can do to collect your money:
-You can garnish his wages. You will go through the court to do this, but he has to be earning wages for you to garnish them. This isn’t typically automatic but instead you have to file all the motions and etc to make it happen. Additionally there are limits on wage garnishment and wage garnishment cannot reduce someone’s wage below a certain amount because they do not wish people to become impoverished due to a wage garnishment. So if your SIL is very low income or out of work this is a useless activity.
-Writ of execution. The court can give you information on how to get one of these, essentially you can have an officer of the court seize personal property of your SIL and it is then sold at auction and you get the proceeds. However many types of property are exempt from this. Again, without knowing your state I cannot be specific, but a primary residence is an example of property that will often be exempt.
-Lien. You can put a lien on their property, when/if they sell the property part of the money they receive from the sale will be used to pay off your lien and you will receive it. In some states liens have a shelf life and eventually expire. And they only compensate you when the property is sold. So you could get a lien on his primary residence but if he never moves or sells the property you would never receive your money.
-Debt collection. You can engage the services of a debt collection agency. There are many types. Some require you to pay an upfront fee, many of them will refund the fee if the debt becomes uncollectable and they have not recovered money for you (many debts become uncollectable after a certain number of years have passed because of the statute of limitations in many states, or if the debt is discharged in bankruptcy.) Many/most will also take a portion of everything they collect on top of that upfront fee.
Some agencies you essentially sell the debt to for a small amount of money and they pocket the difference between what they paid you and what they collect. Those companies stay in business primarily because they pay extremely small amounts of money for debts and they know they will not collect on most of them, but they survive on the few that they do collect. What that means is you will only get a very, very small portion of your $5,000 from the collection agency and that is all you will ever see.
Note that you can go to collections immediately, and do not need a judgment in small claims court. In fact, if you think it will end up that way it is probably better to go to a collections agency right off the bat since you avoid the time/expense of small claims court. Be warned, the only people who might be less happy with the “service” debt collection agencies provide than the debtors who get harassed on the phone are the debt owners who routinely get screwed by semi-fraudulent practices and a generally shady industry.
IANAL but as I understand it, splitting the load in half doesn’t change the terms of the contract. If the terms did not include repayment from the daughter, would the XSIL be expected to pay up under different terms? And probably the key info here is whether there is a written contract. If a judge has to determine what the contract, if any, was, wouldn’t he consider the terms that the daughter is being held to determine the terms the XSIL would be held to?
Thanks for the replies. My state has a small claims limit of $5000 and half the loan is less. Daughter has agreed ( and started ) to repay.
I did this so they could avoid bankruptcy and blacker marks on credit ratings from walking away from a second mortgage.
Sounds like I may be able to put a black mark back on his credit rating.
What documents do you have for the loan?
Letter between me and daughter, bank statements & checks showing transfer and payments.
Any idiot can give opinions now? SWEET! Yea take him to court. It’s his debt too he should pay it back.
Couldn’t the SIL join the daughter as a third-party defendant and ask for half of whatever judgment is entered against him?
Also, you have to determine if your state has joint and several liability. He might be on the hook for the whole thing.
I’m confused. If they are in the “midst” of a divorce, then the divorce isn’t final.
How can your daughter possibly have divorce papers saying that he is responsible for repayment?
Papers drawn up to say joint liability on all debts - didn’t mean to imply/say final. They in the 90 day waiting period.
Going after him in full court per divorce decree will cost more in lawyers and court fees than likely recovery, small claims is only a couple of hundred in fees and my time (have lots).
That’s what might get you. If you get a judgment for $5000 against him, he could implead your daughter to get her contribution (1/2).
Even if you get a judgment against him for $10000, if your state has joint and several liability, then you could collect all $10k from him (or take $5k and let it go) but he is still able to sue your daughter for half of what he ends up paying.