I loaned her money - she gave me collateral then didn't pay me back

[dott]

Loan took place in TN - I now live in FL.

I loaned a friend money to keep her house out of foreclosure. She promised to pay me back within a week because she was expecting an insurance check. She gave me a diamond ring and an antique cabinet to hold as collateral. She and her hubby signed a note saying the money would be paid back within a week. Of course the week came and went and they paid me nothing. They avoided us and gave us excuse after excuse. This went on for over a year. We moved to FL and took the items with us. She called me 14 months after the loan to say she had 1/2 the money and wanted the diamond ring back but that we could keep the cabinet. By then, hubby didn't want to return items to them. He said they forfeited items when they didn't pay us back after the agreed one week. My question - is there a statute of limitations on a personal loan between friends (former friends now)? I don't want this to be an issue between hubby and me. Just want it to be over and want to know that they can't just show up in our new town one day demanding "their" stuff back. Please advise.

 

[BL]

http://www.nolo.com/article.cfm/ObjectID/0566BBF3-858F-4E25-89F7A06B61F9CEF5/catID/DCA1178C-B579-49DC-AECDFCB8A7E9A20B/104/308/280/FAQ/#48B41B47-2835-48C1-A7FDF384BA0F5813

Well , they could File in their State and you would have to fight it there .

No, they can not just come and get their belongings . It is/was collateral for the exact amount of money owed ( not partial ).

You have a promissory note . This is a civil matter and a Court would have to decide any issues .

 

[JETX]

He said they forfeited items when they didn't pay us back after the agreed one week.

No one can say that without reading the EXACT terms of the security agreement.

My question - is there a statute of limitations on a personal loan between friends (former friends now)?

Yes. Based on your post, presumably, this is a written agreement. As such, the SOL for a written contract in TN is 6 years. Theoretically, you could pursue payment for that time.

I don't want this to be an issue between hubby and me. Just want it to be over and want to know that they can't just show up in our new town one day demanding "their" stuff back. Please advise.

Very simple. Send them a WRITTEN demand (certified RRR) including the following:
1) Demand payment in full within 30 days.
2) If payment is not made within that time, the 'property' will accrue additional storage and handling fees of $20 per day until recovered.
3) If not recovered within another 30 days, the property will be disposed of with the proceeds to be applied to the outstanding debt plus storage fees.

Write back in 60 days and let us know how this ends.

 

[dott]

Thanks for the quick replies!!

Just want to clarify a few things.........

The agreement was very simple and states that they will pay us back the amount borrowed within one week and that they have given us the ring and cabinet as collateral. It does not SAY that they will forfeit the items if they don't pay, just that they will pay within one week and that we are holding the items as collateral. The fact that they would FORFEIT the items if they did not pay within one week was understood by all. Secondly, we do not want to engage in any communication with these people ever again. We do NOT want our money back now. They were horrible to us and it was a big hassle moving this enormous cabinet, etc. They are now divorced. Both are battling drug problems (I found out about their drug use only a few weeks before loaning them the money for the house and have heard it has gotten much worse). I simply do not want to bring all that goes with that into my or my family's life. They have not tried to contact us again and it has been almost a year since the one phone call I did receive from them. I just wanted to know if there was a legal time limit for them to contact US and initiate something.

 

[JETX]

The agreement was very simple and states that they will pay us back the amount borrowed within one week and that they have given us the ring and cabinet as collateral. It does not SAY that they will forfeit the items if they don't pay, just that they will pay within one week and that we are holding the items as collateral.

Sounds like the attorney who drew that up is an idiot!!

The fact that they would FORFEIT the items if they did not pay within one week was understood by all.

What you think was 'understood by all' is NOT relevant. The ONLY relevance is the written agreement.

Secondly, we do not want to engage in any communication with these people ever again. We do NOT want our money back now.

That makes it even simpler. Just return their property to them and get a receipt for return.

I simply do not want to bring all that goes with that into my or my family's life.

What you 'want' is not relevant. The fact is.. you have entered into a legal 'arrangement' with them.

I just wanted to know if there was a legal time limit for them to contact US and initiate something.

Yep. Since your agreement 'apparently' doesn't have a deadline for ownership transfer of the 'collateral', they have the right to try to recover pretty much forever. Your only option now is to try to set a date by writing them with 'notice'. Your only other option is to sell the items and send them the FULL amount received, less action expenses of sale.

 

[dott]

Whoa buddy! Calm down! This was an agreement hastily written between friends. It was not done by an attorney. If I had mountains of legal expertise then I wouldn't be posting my questions on this site, now would I???

We simply jotted something out on a piece of paper. They don't even have a copy of it. I'm the only one who has anything in writing, so "legally" there's no written proof ANYTHING was ever agreed upon. I'm the nice guy here! I kept them from losing their house!! I'm the nice guy who loaned them money and got stiffed and then endured their verbal abuse when I barely mentioned it after months and months and months. If you don't have anything constructive to say, then let someone else answer me.

 

[JETX]

Why, why, why.... is it that people come to this site, ask for legal advice, then piss and moan when they get it.... but it isn't what they want to hear??
I have 'no dog in your fight'. Do whatever the hell you want, I really could not care less whether you listen and benefit from my advice.... or don't. Your choice.
Have a hap-hap-happy day!!

 

[dott]

I don't understand why someone would offer help and expertise and then nit pick every tiny word! I was trying to be concise and not ramble on and on and on with hundreds of minute details. All you've done is give me snide, snippy, curt, insulting, RUDE responses. I DID NOT ASK FOR THAT!

 

[I AM ALWAYS LIABLE]

My response:

You have every right to sell the collateral. That was the purpose of it in the first place. The purpose wasn't to gather dust - - it was meant to be sold in the event of a default. That's exactly what happened. A secured creditor may foreclose and sell its collateral if the value is less than the debt. On the other hand, if the collateral is worth more than the debt, the assignee, with the consent of the secured creditor, will attempt to sell the collateral so that any equity therein can be paid to unsecured creditors.

Sell it and be done. If the debtor attempts to sue you, let them explain to a judge how you came into possession of the ring and furniture. How much you want to bet that nothing will happen?

IAAL

 

[panzertanker]

I don't understand why someone would offer help and expertise and then nit pick every tiny word! I was trying to be concise and not ramble on and on and on with hundreds of minute details. All you've done is give me snide, snippy, curt, insulting, RUDE responses. I DID NOT ASK FOR THAT!

I do not understand why you feel it is "nit-picking". JETX merely clarified that "feelings" and "wants" don't add to a hill of beans in the legal world...

Are all OP's this ignorant?

Read IAAL's response, maybe you will like it better...

 

[JETX]

My response:

You have every right to sell the collateral. That was the purpose of it in the first place. The purpose wasn't to gather dust - - it was meant to be sold in the event of a default. That's exactly what happened. A secured creditor may foreclose and sell its collateral if the value is less than the debt. On the other hand, if the collateral is worth more than the debt, the assignee, with the consent of the secured creditor, will attempt to sell the collateral so that any equity therein can be paid to unsecured creditors.

Sell it and be done. If the debtor attempts to sue you, let them explain to a judge how you came into possession of the ring and furniture. How much you want to bet that nothing will happen?

IAAL

IAAL, I would agree with you if this were a 'normal' deal. However, I suspected that it wasn't.... and it was confirmed by the OP's response.

There is no 'due date' on the repayment agreement. Therefore, the note is NOT overdue, the 'borrower' is NOT in breach, and the security clause would not set in until such time as a breach occurs. Though I agree with you that little is likely to come from this, especially with the difference in states; however, the fact remains (at least to me) that the right to collateral does NOT exist without a breach.

 

[dott]

IDIOT! The due date was exactly ONE WEEK from the date she borrowed the money from me.

 

[I AM ALWAYS LIABLE]

There is no 'due date' on the repayment agreement. Therefore, the note is NOT overdue, the 'borrower' is NOT in breach, and the security clause would not set in until such time as a breach occurs.

My response:

JetX, the writer said, "The agreement was very simple and states that they will pay us back the amount borrowed within one week and that they have given us the ring and cabinet as collateral."

The agreement was breached. The debtors forfeited the collateral.

IAAL

 

[JETX]

My response:

JetX, the writer said, "The agreement was very simple and states that they will pay us back the amount borrowed within one week and that they have given us the ring and cabinet as collateral."

The agreement was breached. The debtors forfeited the collateral.

IAAL

Okay. Though I understand and agree with you.... I hope that a court would see if that way (in the unlikely chance that it gets there).

 

[panzertanker]

IDIOT! The due date was exactly ONE WEEK from the date she borrowed the money from me.

Who here is really the idiot:
Jetx, who gave you legal advice FOR FREE,
OR
YOU, someone who has not bothered to try to collecta debt that was due ONE YEAR AGO???

I vote for you, the forum IDIOT!

(why do people come here asking for advice and then act like morons???)