Friend owes me $26,500 and can't pay

[jhbond]

What is the name of your state (only U.S. law)? Florida

I loaned a former friend over $25,000 two years ago. We have no contract but I have emails from him telling me he would pay me back soon.
He has made little payments here and there but nothing substantial. Now the date for when he said he would pay back has passed.

I hired an attorney to collect from him. My attorney sent a demand letter and my ex-friend called my attorney and explained his circumstances. He told my attorney that he has no job and has debts totalling over 100K. He told my attorney that he had no idea when he could pay me back but that he would continue to make small payments as he could.

My attorney told me that my ex-friend is "judgement proof". The attorney said I should sue anyway and get a judgement on the books. The ex-friend has sent me and my attorney emails saying he was going to have to consider bankruptcy. My attorney says he is bluffing and says I should sue anyway.

My question is if my ex-friend goes bankrupt will I have any chance of recovering my money including the fees I have paid my attorney? My attorney wants $5,000 to file suit.

 

[annajosie]

If your friend is "judgement proof", then you won't be collecting money from him. As far as getting a judgement, you can do that, but that doesn't mean you can collect it.

If your friend files bankaruptcy, you will still be SOL. If your attorney is charging you $5000, you should be suing him!!!

 

[jhbond]

Thank you for the reply. So am I spinning my wheels if I try to sue him? He has not filed yet but if I pay an attorney to sue him and then he files will I be out the attorney fees as well?

I am trying to find out if I have any options if he goes Chapter 7.

 

[annajosie]

If your friend qualifies for a Chapter 7 bankruptcy, then you are pretty much out of luck, unfortunately.

I do not believe that you can recover your attorney fees and you won't be able to collect the money that is owed to you.

If you decide to go ahead and get a judgement, there is always a chance that down the road, if your friend comes into any money, etc., you may be able to go after him. But if he files BK, then all bets are off.

Good luck to you.

 

[jhbond]

How hard is it for someone to qualify for Chapter 7? I am not aware of him having a job right now and I know he is up to his eyeballs in debt.

If I cannot collect even attorney fees if he files bankruptcy why would an attorney think it such a great idea to pursue a suit?

 

[Bosco]

How hard is it for someone to qualify for Chapter 7? I am not aware of him having a job right now and I know he is up to his eyeballs in debt.

Not too hard, and if he has no income and loads of debt, he almost certainly will qualify.

If I cannot collect even attorney fees if he files bankruptcy why would an attorney think it such a great idea to pursue a suit?

Because they could still come after you for the legal fees incurred as they were providing you a service.

Sounds to me like this attorney is just trying to hit YOUR pocketbooks. By his own admission your friend is judgment proof meaning that the only thing a judgment will do to your friend is possibly ding his credit, but if he's already behind on that much debt, a judgment is not going to hurt much as his credit will already be trashed.

I say fire your lawyer.

 

[tranquility]

To sue a "judgment proof" person seems unwise. Better would be for your attorney to give a letter saying it would not be profitable to take the other party to court. Then you can take this debt where you have exhausted your reasonable steps to collect and call it a non-business bad debt and deduct it on your taxes.

 

[jhbond]

If this were a normal case and I were to file suit, is it possible for the whole case to cost me more than $10,000 from start to finish?

 

[tranquility]

It is very fact sensitive to determine how much some legal process will cost. 10K? Sure. Maybe more, maybe less, depending on the attorney.