Personal Loan, Gifts and Small Claims Court

What is the name of your state? California

Hi,

10+ years ago I loaned a friend $2000. Over the years he's managed to pay back $400. I've been asking him for some sort of idea when I could expect repayment over the years but he always had one excuse or another. (Just had a kid, CC debt, Bad econ, etc.)

My wife recently sent an email asking if we could expect the money this year as she's planning an overseas trip for this year. Admittedly, she sent the email to my friend's wife's email account (though we assumed it was for the both of them) and thus insued much outrage on my friend's wife's part.

To cut to the chase, they gave us a number of baby items that their children had outgrown about a year ago, with no mention of the loan when the items were transferred. My friend's wife now wants to apply these items, retroactively, to the loan amount. She's line itemed them and assigned a value of 50% of retail to each item. This total is approximately $850. My (ex)friend is "disgusted and disappointed" and seems to want nothing to do with this now, and I've only communicated with his wife. The good news is not only do I have the borrowed amount in writing (email) but the notion that the baby stuff was a gift seems not to be in contention.

My question is, at what point is Small Claims Court worth it? I might be willing to apply $2-300 dollars to the loan just to solve the matter without hassling with court but I get the impression she fully expects nearly all of 'her' $850 applied to the loan.

Any help or advice would be appreciated.

Thanks
John

John in CA said:

What is the name of your state? California

Hi,

10+ years ago I loaned a friend $2000. Over the years he's managed to pay back $400. I've been asking him for some sort of idea when I could expect repayment over the years but he always had one excuse or another. (Just had a kid, CC debt, Bad econ, etc.)

My wife recently sent an email asking if we could expect the money this year as she's planning an overseas trip for this year. Admittedly, she sent the email to my friend's wife's email account (though we assumed it was for the both of them) and thus insued much outrage on my friend's wife's part.

To cut to the chase, they gave us a number of baby items that their children had outgrown about a year ago, with no mention of the loan when the items were transferred. My friend's wife now wants to apply these items, retroactively, to the loan amount. She's line itemed them and assigned a value of 50% of retail to each item. This total is approximately $850. My (ex)friend is "disgusted and disappointed" and seems to want nothing to do with this now, and I've only communicated with his wife. The good news is not only do I have the borrowed amount in writing (email) but the notion that the baby stuff was a gift seems not to be in contention.

My question is, at what point is Small Claims Court worth it? I might be willing to apply $2-300 dollars to the loan just to solve the matter without hassling with court but I get the impression she fully expects nearly all of 'her' $850 applied to the loan.

Any help or advice would be appreciated.

Thanks
John

Click to expand...

My response:

Three wonderful defenses:

1. The applicable Statute of Limitations;

2. The Statute of Frauds; and,

3. Laches.

What do these add up to?

You lose.

IAAL

Thanks

Thanks for the reply.

I was afraid something of that nature would be the case. I suppose I will recover what I can and call myself lucky.

John

You never should have let this go so long. Nore should you have loaned so much to a friend. It always goes bad. The friend expects the loanee to forget it since they're friends. Take the baby stuff, sell it, and keep pursuing it. If you mention court, your "friend" will get wise and start thinking about the statute of limitations. Chalk it up to a learning experience. My ol-fall-back, Judge Judy, DID award a man money from a loan over a decade old. You could always try that, and at the least, even if you get nada, you will expose your "friend" for the "friend" he is to those he may ask to borrow money from in the future.

Thx for the help all.

I was able to get him to agree to pay me back about 75% of the $1600 total in monthly payments. And I got a signed contract from him. Of course, the friendship is shot but I guess he was never really my friend.

Lesson learned.

One final suggestion.. now that he has revalidated the loan in writing (and has reset the statute of limitations), do NOT let this one slide again. You were very lucky that this person helped you out (by the re-validation)....

And, depending on how you worded the agreement, he may have re-validated for the full original amount!