Personal Loan to friend in default

[kadie]

What is the name of your state (only U.S. law)? Arizona

I loaned a friend $15K. I was a written agreement, with interest and he agreed to pay attorney fees if I had to take legal action for repayment. It was supposed to be short term, only 8 months and then I was to be paid in full, was due Mar 22, 2007. I felt he was secure in his job and he sufficient resources to pay the loan back in a timely manner. His house was worth over $350K. About four months before the loan was due he was fired from his job and then about a month before the loan was due his house went into foreclosure. He's been making a payment monthly, sometimes missing a month. The payments are never made on a certain date and I never know how much he will pay. I'm beginning to think it's time to take legal action but I'm worried that it will be a long expensive process. I have over a years worth of emails from him saying he'll pay me back every penny. When I told him that it may be time for legal action he told me to to "go ahead, that he would show the courts how much he makes and how much he's paid me and that the court would just tell me he's paying everything he can". I'm just wondering if the cost of a judgment and garnishment is worth it at this time. (I believe AZ will garnish his wages if I have a judgment against him, is this correct?)What is the name of your state (only U.S. law)?

 

[HomeGuru]

What is the name of your state (only U.S. law)? Arizona

I loaned a friend $15K. I was a written agreement, with interest and he agreed to pay attorney fees if I had to take legal action for repayment. It was supposed to be short term, only 8 months and then I was to be paid in full, was due Mar 22, 2007. I felt he was secure in his job and he sufficient resources to pay the loan back in a timely manner. His house was worth over $350K. About four months before the loan was due he was fired from his job and then about a month before the loan was due his house went into foreclosure. He's been making a payment monthly, sometimes missing a month. The payments are never made on a certain date and I never know how much he will pay. I'm beginning to think it's time to take legal action but I'm worried that it will be a long expensive process. I have over a years worth of emails from him saying he'll pay me back every penny. When I told him that it may be time for legal action he told me to to "go ahead, that he would show the courts how much he makes and how much he's paid me and that the court would just tell me he's paying everything he can". I'm just wondering if the cost of a judgment and garnishment is worth it at this time. (I believe AZ will garnish his wages if I have a judgment against him, is this correct?)What is the name of your state (only U.S. law)?

**A: if he lost his job and has no income, there is nothing to garnish.

 

[kadie]

To clarify...

he is currently employed again, just not with the same company. He doesn't have the same assets as before since his house went into foreclosure. He still has some personal assets and used to brag about owning a house with his brother in Hawaii and that he also owned the house his mother lived in. I don't know if this is true. I found his mother's house but didn't see his name on the Assessor's site, only his mother's name was listed.

 

[Dewey]

Well he already violated your written agreement by not having it paid off two years ago. I'm also in AZ and know you have 6 years to take court action on a written agreement.

I have a sort of similar situation and now have to keep track of a loan with interest and late fees....do you have software to do that? Which kind?

He obviously doesn't own his mother's house if he's not listed on the assessor's site. Can you find the house in Hawaii that he supposedly owns with his brother?

You can sue him, get a judgment and either lien his property, freeze his bank accounts, and/or garnish his wages. I was told that you can get up to 25% of their income. However, that is another whole process. You get the judgement and then have to start a separate procedure for those other things.

Is he married? Arizona is a community property state. You'll have to include his wife in your suit.

 

[Apocolyps3]

Hi Kadie and Dewie,
I, too, am located in AZ and am in a similar predicament. Can you let update me of your situation? Were you able to find closure?

 

[Zigner]

Hi Kadie and Dewie,
I, too, am located in AZ and am in a similar predicament. Can you let update me of your situation? Were you able to find closure?

That situation was 4-1/2 years ago. It is unlikely (though not impossible) that the OP will return.

You would be better served by starting your own thread for your questions.