Moral / Legal Dilemma

[william2486]

What is the name of your state? Tennessee
A family member loaned me $10K 5 years ago. Long story short, he would not accept my payments and when confronted about the loan would continually tell me "not to worry about it". He passed away earlier this year, rest in peace. Another family member found the wire transfer paperwork while cleaning out some things and questioned me about the money. I explained the situation to him and my repeated attempts to repay the loan, he became very angry and demanded the money.

Morally I feel that I owe the money to someone, legally I don't know. There is nothing in the will about the loan, but my other family member feels very strongly that I owe the money to the estate. There are no formal loan documents, nothing was signed, only my verbal agreement to repay the loan. Do I have a legal obligation to repay the loan to the lenders estate or the beneficiaries?

Thank you

 

[garrula lingua]

Did you check on the Statute of Limitation for a debt in your state ?

Morally, you know you owe (what are the family relationships - was this a brother, sister or aunt, or cousin ?
Legally, the issue, as I see it, is:

Did your relative 'forgive' the loan, essentially making it a gift, when you tried to repay ?

That would depend on the exact wording. 'Don't worry about it' can mean 'pay me later, I know you're hurting now' ...

In reality, the only way #2 family member could prevail in court, is if s/he could ProvE there was a loan to you, and that you did not repay.

The only proof of the loan is from you. The amt is low. ...

Has #1's estate been distributed & probate closed ?

#2 may pursue this in small claims court for the lesser limit.

...morally, I'd pay; legally, a Judge may see it as a gift/forgiven loan if there was a lawsuit.

 

[garrula lingua]

The SOL in your state appears to be 6 years.

 

[william2486]

Thank you for the prompt reply. My Grandfather loaned me the money. Before accepting the money from him I insisted on working out a payment plan, interest rate, etc. All of this was done verbally, x amount a month starting the month after receiving the money, 0% interest.

I mailed the first pymt, check, about 45 days after receiving the money. Called my Grandfather to make sure he received the check and he said that he did, but that he was not going to cash it. I reminded him of our agreement and he said "don't worry about it".

I made a second payment, same thing, then I spoke with him face to face and tried to make a third payment, none of my checks were ever cashed. Moving forward over several months, phone conversations and visits he continually refused my payments and said "don't worry about it".

The second party, the one demanding the money, is my uncle, my Grandfather's son.

If there is nothing to state otherwise is the loan forgiven upon the lenders death? The will has been in probate for approx 5 months and should be distributed within the next 30 to 45 days.

I agree, I do have a moral obligation to repay the loan. My bigger issue is the stink my uncle is causing with the family. My understanding is that he called every family member before calling me and then when he ran out of family members he called me. The conversation was not pleasant, he started off by calling me several names, claiming I took advantage of his Father, a very capable man. He then demanded the money in one lump sum, said that I stole the money from the estate and further said he did not care about the terms of the loan.

Thank you again

 

[BelizeBreeze]

Thank you for the prompt reply. My Grandfather loaned me the money. Before accepting the money from him I insisted on working out a payment plan, interest rate, etc. All of this was done verbally, x amount a month starting the month after receiving the money, 0% interest.

I mailed the first pymt, check, about 45 days after receiving the money. Called my Grandfather to make sure he received the check and he said that he did, but that he was not going to cash it. I reminded him of our agreement and he said "don't worry about it".

I made a second payment, same thing, then I spoke with him face to face and tried to make a third payment, none of my checks were ever cashed. Moving forward over several months, phone conversations and visits he continually refused my payments and said "don't worry about it".

The second party, the one demanding the money, is my uncle, my Grandfather's son.

If there is nothing to state otherwise is the loan forgiven upon the lenders death? The will has been in probate for approx 5 months and should be distributed within the next 30 to 45 days.

I agree, I do have a moral obligation to repay the loan. My bigger issue is the stink my uncle is causing with the family. My understanding is that he called every family member before calling me and then when he ran out of family members he called me. The conversation was not pleasant, he started off by calling me several names, claiming I took advantage of his Father, a very capable man. He then demanded the money in one lump sum, said that I stole the money from the estate and further said he did not care about the terms of the loan.

Thank you again

Then your response should have been "you have the right to explain that all to the probate judge when the estate files it's suit".

 

[Dandy Don]

If grandfather refused your payment, then he did not intend for you to make repayment and you should stand your ground and not pay. Your argument is going to be that it is a gift and also it is a common practice for debts to be forgiven when a death occurs.