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smallclaimsQ

Junior Member
What is the name of your state? Georgia

Hello All,

Thank you in advance to anybody that is willing to offer an opinion.

A former acquaintance of mine asked me for a loan for $2000 back in November of last year in order to pay his child support. I wrote a contract for him and a guarantor to sign. The contract is dated, notarized, stipulates the sum, the intervals at which payments are due, and the penalties associated with none payment.

The loan was half paid, and then the signer ceased payment as he said he didn't have money. His guarantor paid a small amount over a month ago. Over $800 is
still owed and I have no reassurance that the remainder will be paid.

This may well be an expensive lesson learned but I am strongly considering small claims court. My personal records of the previous loan payments are accurate (I
recorded the payment sums and the dates of payment) and I have many copies of the signed and notarized contract. I do not have any signed receipts for the payments and these payments were made with cash (this may work for me rather than against me, perhaps?). I am currently waiting on a bank statement that will indicate that the sum borrowed was withdrawn from my bank at the time the
contract was signed (cash, but I believe this corroborates my version of the facts along with the detailed signed contract).

My questions are these:

1) Is such a case easily settled/won in small claims court?
2) If I cannot locate the obligor or feel that he may not have a wage to garnish, is it reasonable to file against the secondarily liable guarantor?
3) If filing against the guarantor (who is more likely to have the money) first is not reasonable, should I try to file against the obligor or the obligor AND the guarantor (either separately or together)?

If anybody can be assistance in this matter it would be greatly appreciated!
 


THE PRACTICE-07

Junior Member
smallclaimsQ said:
What is the name of your state? Georgia

Hello All,

Thank you in advance to anybody that is willing to offer an opinion.

A former acquaintance of mine asked me for a loan for $2000 back in November of last year in order to pay his child support. I wrote a contract for him and a guarantor to sign. The contract is dated, notarized, stipulates the sum, the intervals at which payments are due, and the penalties associated with none payment.

The loan was half paid, and then the signer ceased payment as he said he didn't have money. His guarantor paid a small amount over a month ago. Over $800 is
still owed and I have no reassurance that the remainder will be paid.

This may well be an expensive lesson learned but I am strongly considering small claims court. My personal records of the previous loan payments are accurate (I
recorded the payment sums and the dates of payment) and I have many copies of the signed and notarized contract. I do not have any signed receipts for the payments and these payments were made with cash (this may work for me rather than against me, perhaps?). I am currently waiting on a bank statement that will indicate that the sum borrowed was withdrawn from my bank at the time the
contract was signed (cash, but I believe this corroborates my version of the facts along with the detailed signed contract).

My questions are these:

1) Is such a case easily settled/won in small claims court?
2) If I cannot locate the obligor or feel that he may not have a wage to garnish, is it reasonable to file against the secondarily liable guarantor?
3) If filing against the guarantor (who is more likely to have the money) first is not reasonable, should I try to file against the obligor or the obligor AND the guarantor (either separately or together)?

If anybody can be assistance in this matter it would be greatly appreciated!

My response:

You said, "I am strongly considering small claims court." Gee, ya think?

Sue everyone on the contract.

IAAL
 

smallclaimsQ

Junior Member
Ha ha. Thanks for the input :)

My main issue is that I may not be able to serve the obligor as I believe he may have recently fallen “off the grid”(regarding residence, place of work). I am wondering what the implication is if I go after the guarantor alone. That is, can he get of the hook if I do not go after the obligor first? Furthermore, IF I can file against the obligor (meaning I can find him) should I file against him first or him AND the guarantor together?

Any thoughts are appreciated!
 

THE PRACTICE-09

Junior Member
smallclaimsQ said:
Ha ha. Thanks for the input :)

My main issue is that I may not be able to serve the obligor as I believe he may have recently fallen _off the grid_(regarding residence, place of work). I am wondering what the implication is if I go after the guarantor alone. That is, can he get of the hook if I do not go after the obligor first? Furthermore, IF I can file against the obligor (meaning I can find him) should I file against him first or him AND the guarantor together?

Any thoughts are appreciated!

My response:

You can go after anyone who signed the contract. Think of it this way; when you co-sign a vehicle loan for someone (and DON'T YOU EVER DO THAT!!), why do you think you're co-signing? It's because you're agreeing to be "on the hook" in the event of a default. Same concept in your situation.

IAAL
 

Zigner

Senior Member, Non-Attorney
Did you state in the contract what the consequences of a default would be?
 

THE PRACTICE-09

Junior Member
Zigner said:
Did you state in the contract what the consequences of a default would be?

My response:

Our writer wrote, "I wrote a contract for him and a guarantor to sign. The contract is dated, notarized, stipulates the sum, the intervals at which payments are due, and the penalties associated with non-payment.

So, we have to presume from that statement that the "Guarantor" knew they were on the hook and could be sued for any balance amount.

IAAL
 

smallclaimsQ

Junior Member
Thanks for the replies!

Yes, I stated in the contract that there would be a late fee/penalty - this was built in to ensure promptness, not to be a loan shark. It ensured very little though.

I believe there is a difference between a co-signer and a guarantor as far as liability. I suppose it may not be relevant in my case, not sure though.

As I mentioned the guarantor is in a better financial position. I would like to file against him and see if I can garnish his wages as he has a job, apartment, and will probably not need to file bankruptcy. I cannot say the same for the obligor. So why sue everybody on the contract, if only one person has what I want? - money.

Can I chase the guarantor in court presumong I've made reasonable efforts on the obligor ( like sent him a letter, etc)? Or must I pursue all legal remedies against the obligor before I can chase the guarantor?

I see what you are saying about the co-signed car loan. Just thought there was a subtle difference in this case.
 

dcatz

Senior Member
The most important "suble difference" is that to take judgment agaisnt the one that you can serve, you'll have to conclude the case and dismiss the one that you couldn't serve. Then, you end up with one source of potential recovery instead of the two that you thought you arranged for when you started.

If that gives you pause, take a little more time and keep searching "on the grid", but also remember that all circumstances can change. If the guarantor is "good for it" today, he/she may not be tomorrow. Don't lose both sorces of recovery.
 

badapple40

Senior Member
To the OP:

You are brilliant. I mean that. You got all the documentation necessary to see that you got paid. That is something 99% of the posters on here fail to do. So, bully for you.

Get a judgment against both. Why you ask? Because the more parties on the hook, the more parties able to pony up, the more the chance that you get paid.

Current bankruptcy law favors payment plans over unconditional discharges. And the amount still owed is relatively small. So bankruptcy is not an option for your debtor.

And here is another thought: by suing both, and obtaining judgments against both, you might find that your guarantor is able to "give up the goods" on the original debtor, to avoid his having to pay it. Most guarantors know the folks they sign for, and the location of assets you can seize upon.
 

smallclaimsQ

Junior Member
Bad apple,

"Get a judgment against both. Why you ask? Because the more parties on the hook, the more parties able to pony up, the more the chance that you get paid."

Thanks for the logical advice here!

Practice,

I will need to look into this further. I know very little about "joint and several". From what I briefly read, Georgia reformed this. I'll need to dig a bit deeper.
 

smallclaimsQ

Junior Member
I received my old requested bank statements in the mail recently. These, unfortunately prove little to nothing regarding my claims as no check for the sum was written from my accounts. Instead there were separate cash withdrawals. Rather useless.

I have my version of the fact and the contract. It occurs to me that another piece would be handy to back up everything (for example, a signed receipt from one of the 2 parties). I believe I would need to go to GREAT pains to even squeeze one more dollar out and get them to sign anything again though. My concern is this: without the signed recipeipt or something like it, the parties (if they think of it) may say: “look, we signed a contract but the money was never dished out in the first place - we owe nothing.” Maybe that is far fetched but I cannot prove otherwise. Is there any way to combat this?
 

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