I am hoping some of you can offer me advice on a problem. Back in 2001, I loaned a good friend $1000.00 to help him start a lawn care business. He was to repay me within 6 month (plus interest). He has to date not repaid a dime, and has made many excuses and broken promises (turns out he’s not much of a friend, & lacks honor). He claims that he had to file for bankruptcy and is working on paying the IRS off. He did not claim bankruptcy against me (no notice was sent).
Because he was a good friend, foolishly, I had no contract drawn up. I did however, have a witness present when the loan was made and terms were discussed. I also have kept copies of emails we have exchanged, discussing the loan and my requests for him to make payments. I can also obtain a copy of the check written to him, with ‘loan’ in the memo field. The loan was made when I lived in Kansas (where he still resides), I have since moved to Colorado.
My questions are concerning how to go about taking legal recourse, and do I have enough evidence to proceed? Thanks for any help you may be able to offer.
I am not a lawyer, but if your evidence for the contract of a loan is being made simply on the evidence you discussed you may have a hard time of it, unless the evidence is straightforward (ie that it was a loan and not a gift) and he agrees that the email communications were real as this stuff is easy to forge. If he is up to his neck in debt in in Kansas and you are in Colorado, I would consider it a lesson learned and move on. The time and aggravation you spend pursuing a relatively small amount of money like this across several states will probably not pan out as a good investment of time.
A friend of mine had was philosophical about making loans like this to personal friends, saying that she considered the money gone as soon as it left her hand, and if she ever got it back she considered it a blessing. IMO whether they are in writing or not, her position is probably the wisest real world take on making loans of this nature to personal friends.
Frankly, a $1000 loan is not worth the legal expense or other effort. Consider it steep tuition rendered. You now know much more about your “friend” as well as much more about loaning money to friends (such as execute an agreement - even with such I ate a $4000 pill last year).
Yes, it’s not worth it to hire a lawyer. No, you shouldn’t write it off. Not if you were me, anyway.
Bluff. The first thing to do is tell him, “Look Joe. You’re a friend, and I hate that I’m in this spot, but I’m talking to a lawyer about this. He wants to sue your pants off, garnish your wages, etc., but I don’t want that. I’m not rich, and I really can’t afford to lose that $1,000. What can we do?”
Expect to compromise. He doesn’t have $1,000 in his pocket. But he can still probably pay you $200 a month or something. The problem is he’ll stop after a few months and you’ll have to repeat the process. But you can get something.
Write this down and put it in your wallet: “never ever ever loan or borrow money to/from friends. It’ll wreck a good thing for sure.”
IANAL but sounds to me as if you’re screwed. No contract? Bad, real bad. And as someone else said, suing will cost you more than the money you’re owed. And unless the person that witnessed this transaction is a blood relative or your spouse, don’t count on them backing you up. They probably won’t because people are shitty like that.
Next time a friend asks you for a loan, either say no or GIVE it to them outright and tell them they never have to pay it back. I do that even if a friend wants $10.
The witness is now my wife, so good news there. I wasn’t planning on hiring a lawyer, but thought it may be worth going to small claims court with it on my own. Bill H’s suggestion seems like a good idea that may be worth trying. $1K does sound like much to a lot of people, put that is a chunk of change to me (plus I worked hard for it). Small claims does not enforce the judgements themselves but you can get garnishment forms and provide them to the employer. Does anyone have advice on how to be successful in the small claims court process?
IANAL but I would not consider it a particularly good thing that the witness is your wife. She is now partial owner of the debt and it boils down to what amounts to one persons word against the other. The emails would help, but probably only if he agreed they were real. I doubt that the lack of a signed promisory note would be that detrimental, given you had an oral and implied contract, but the unless he admits that at least some of your evidence is real, sounds like you would have a hard time proving things.
Seriously, If you’ve ever wanted to be on TV, this sounds like a case for The People’s Court.
If the check had “loan” written on it when you gave it to him and it wasn’t written in afterwards, and you have e-mails from him promising to pay the debt, or at least acknowledging that he owes the debt, I would think you’ve got a good chance of winning in small claims court. At least, I’ve seen people with that sort of evidence win all the time on The People’s Court.
I am not a lawyer either, but I think it would have been better to have the witness be a disinterested third party. The fact that she is your wife kind of seems suspect to me (not that I doubt that you and she are telling the truth, but a judge might or your “friend” might claim that she’s only saying what you want her to say because she IS your wife).
I’d say try small claims court or chalk it up for an expensive lesson. Even if you win in SCC, if the guy doesn’t have the money, he can’t pay you. If he doesn’t have wages, they can’t be garnished. If he doesn’t have assets, you can’t put a lien on them. If he is still doing this lawn care business, then he is the employer - so who is going to do the garnishing?
What would happen if he phoned his friend about it, and the friend blusters, but says he will pay eventually and he tapes it, or has a lawyer present. Is that legal? Would the evidence help if it was?
You should look at the IRS tax booklet about writing off a bad debt to see if your transcation qualifies. You might be able to reduce your taxable income which is at least something. Also, if that’s the case, you can report the bad debt writeoff to them and your “friend”, similar to a 1099. That could require require him to pay taxes on it. Revenge is sweet.
Try to refer it to a collection agency. Yeah, they 'll get half, but if they take the case, & he doesn’t pay, they have ways of getting it on TRW & Equifax. I tried to post last nite, but my satellite(line) went down. But I agree w/ all the above. If you want to do it yourself, have him served by the sheriff-maybe you can embarrass him at home/work, & it will shake him up to be served by guys in uniform w/guns.
You can take it to small claims court. You’d get a judgment, but you might not be able to collect on it. Depending on how familiar your friend is with the law, the judgment might scare him into paying - or not. You can also have the judgment filed so that if he ever tries to sell anything reportable (e.g., real property), he’ll have to settle his debt to you out of the proceeds. All of this takes money and time and for $1,000, may not be worth the time, effort and expense. If you’re going on the principle of the thing, it is worth it.
If you can get it on one of those court programs, you’d definitely win, however, you both would have to agree to appear and he might refuse. Also, consider if you really want to air your dirty laundry in public.
You may want to just chalk it up to a lesson well-learned. Never put money between you and your friends.