Worth it to sue for ~$3,000 if I know the defendant can't pay?

[RedJohann00]

Minnesota.

I'll try to keep this short...

Took out a loan for a co-worker about 6 years ago so he could buy an engagement ring (I know, stupid. Please don't lecture me; I already feel dumb about it).

Co-worker ended up buying a car with the money instead; still not sure if he was lying the engagement the whole time or not. Jerk move either way.

We haven't worked together for years, but he agreed to have the loan paid off with in 3 years (it's now been close to 6). I've been cutting him slack; but now he's missing payments and its affecting my credit. From what I know, he doesn't have real steady employment.

## Is it worth suing him if I know he won't be able to pay even when the judge finds in my favor? I'm constantly nervous that this guy is just going to 'disappear' some day and I'll be screwed. Would that be a good reason to sue; so that this whole thing is in writing and official?

Sorry if these are dumb questions...I've never had to deal with the legal system before and I feel completely lost. Thanks...

 

[sandyclaus]

Minnesota.

I'll try to keep this short...

Took out a loan for a co-worker about 6 years ago so he could buy an engagement ring (I know, stupid. Please don't lecture me; I already feel dumb about it).

Co-worker ended up buying a car with the money instead; still not sure if he was lying the engagement the whole time or not. Jerk move either way.

We haven't worked together for years, but he agreed to have the loan paid off with in 3 years (it's now been close to 6). I've been cutting him slack; but now he's missing payments and its affecting my credit. From what I know, he doesn't have real steady employment.

## Is it worth suing him if I know he won't be able to pay even when the judge finds in my favor? I'm constantly nervous that this guy is just going to 'disappear' some day and I'll be screwed. Would that be a good reason to sue; so that this whole thing is in writing and official?

Sorry if these are dumb questions...I've never had to deal with the legal system before and I feel completely lost. Thanks...

How long ago was the last missed payment? Did you have any kind of written agreement?

Minnesota has a 6-year statute of limitations on bring suit for either a written or verbal contract. That would be 6 years from the date of the last payment.

That being said, no one can tell you whether or not it's a good idea to sue. You have a valid concern with being able to collect. Even if you are successful in obtaining a judgment, it will be up to you to collect on it - and if the debtor isn't easy to find, that could definitely be a problem. There is, however a 10-year SOL on collecting a judgment plus a 4% annual interest rate on the unpaid balance. If you found out where he works, you could obtain a wage garnishment for 25% of his disposable wages, and there is no exemption on bank account levies.

Who knows? Over the next 10 years, his financial situation could greatly improve, which could make collecting the debt far easier. You would, however, need to keep track of them so that you could collect that debt. If he moves out of state, you might still be able to collect, but you'd first have to domesticate the judgment in his home state FIRST. Once you did that, the judgment would now be collectible according to that state's collection laws.

 

[quincy]

Minnesota.

... We haven't worked together for years, but he agreed to have the loan paid off with in 3 years (it's now been close to 6). I've been cutting him slack; but now he's missing payments and its affecting my credit. ...

... Would that be a good reason to sue; so that this whole thing is in writing and official? ...

To emphasize sandyclaus' question: Do you currently have anything "in writing and official" that ties this friend of yours to the loan?

 

[swalsh411]

but now he's missing payments and its affecting my credit.

Nope. Your credit is being affected because you're not making payments on the loan that you took out and is your responsibility. Your friend owing you money is only marginally related. Even if he's not making payments to you, you still need to be making payments on the loan.

 

[RedJohann00]

Thanks for the advice all. And thanks for the dad-lecture, swalsh411. You didn't say anything that I haven't been beating myself up over for years.

In any case, yes, I did manage to get the guy to sign an agreement. It was kind of a sloppy form that I found online, bu it makes it very clear that I expected the loan to be paid off in full within 3 years.

One followup question if anyone can help me on this one too. When I took out the loan for this guy, we both lived in Minnesota (in Saint Paul). But this guy has since moved to South Dakota. Do I have to file the suit in SD where he now lives? Or can I file here in Saint Paul?

Thanks again all...

 

[swalsh411]

I said what I said to correct an inaccuracy in your post.

You can file where this agreement was signed. I wouldn't expect him to show up.

 

[RedJohann00]

Thank you. Much appreciated

 

[quincy]

One followup question if anyone can help me on this one too. When I took out the loan for this guy, we both lived in Minnesota (in Saint Paul). But this guy has since moved to South Dakota. Do I have to file the suit in SD where he now lives? Or can I file here in Saint Paul? ...

You can verify at your local courthouse but generally, for small claims actions, you must file in the court that has personal jurisdiction over the defendant - which means, in your case, filing in South Dakota.

 

[BigMouthWino]

You're better off to sue him where he lives. It will make enforcing the judgment a lot easier. See if you can find a collection attorney where he lives to sue for you. Then you will likely only have to pay the court costs and a percentage of whatever they recover.

 

[TigerD]

Now that you have those answers out of the way, I have a question:

Why would you bother going through the expense and time of suing someone you know doesn't have the money to pay? I understand you are upset, but don't go throwing good money after bad.

If you win, you get a judgment that you most likely don't know how to enforce. And so you tie more time, stress, and bad feelings up for years.

It might be best to simply accept you got taken and move past it.

DC

 

[swalsh411]

Now that you have those answers out of the way, I have a question:

Why would you bother going through the expense and time of suing someone you know doesn't have the money to pay? I understand you are upset, but don't go throwing good money after bad.

If you win, you get a judgment that you most likely don't know how to enforce. And so you tie more time, stress, and bad feelings up for years.

It might be best to simply accept you got taken and move past it.

DC

But they are good for many years and can be renewed. His financial situation may improve. Of course that requires the OP to keep tabs on him.