family member defaults on loan

[debra7252]

What is the name of your state? I live in Florida. 6 years ago, I loaned a family member $6000.00. My cousin who lives in Massachusetts was in debt and being harrassed by collectors. To try to help her, I loaned her $6000 with the understanding she would pay it back within 5 to 7 years. After finding myself in financial trouble with a breast cancer diagnosis and thousands in medical bills, I asked her to begin paying back the loan.

At first she agreed and said she would pay $100 - $200 per month. In the past 10 months she has paid a total of $300. When I confronted her once again, she stated it was not a "loan" but a gift I had given her, that she originally felt "badly" that I was having financial difficulties, that she was trying to "help me out" as I had helped her, but that she does not have the money to send me, and if I push the issue, I would be ending a 42 year old relationship with her. That was 2 months ago and I have not heard from her since.

What are my rights in recoving this loan? How do I go about it?

Thank you for your help.

 

[JETX]

Is the loan in writing?? If so, then your 'rights' are probably pretty good. As for SOL concerns, your post is not clear which state would have jurisdiction, but the statutory clock would have started on the date of her last 'missed' payment. The SOL's are as follows:
Florida:
Open Acct.: 4 years
Written Contract: 5 years
Massachusetts:
6 years for both

However, if the loan is verbal, you will have to prove that the loan did exist and that there was an agreement to repay it. It is possible that the payments themselves or other correspondence could help you support your claim.

 

[debra7252]

The loan agreement was verbal

The loan to my cousin in Massachusetts was verbal in agreement.
I would like to handle this matter in Florida small claims court if possible. I know I would loose out as small claims here deals with a max of $5000, loosing out on $700 as a result. Can this matter be handled thru Fl Small Claim Court. She resides in Massachusetts, I in Orlando, Fl.

I do have correspondence from her agreeing to payments as well as her agreeing to the total amount due, this is in writing.

 

[JETX]

You can certainly file your lawsuit in Florida, but she would have a right to challenge the 'venue' due to jurisdictional issues.

What were the circumstances (who, where, how paid, etc.) for the verbal loan?

 

[debra7252]

I was living in Pembroke Pines, FL at the time. She was drowning in bills in Massachusetts, where she has lived all her life. I sent her a personal check for $6000.00, she had originally asked to borrow $10,000. I have the cancelled check.

Is this something I could handle in small claim court here in Florida. Should I send her a demand letter, certified mail?
Do I need to hire an attorney to resolve the matter, if so, what kind?

Thanks so much for your help.

 

[JETX]

It should be obvious that your first step should be demand letters.

Include details of the loan (date, how much, how paid, etc.) and emphasis that it was clearly a loan. Also include the terms of the repayment agreement. Also say something like, "In the event that you disagree with the terms of the loan, please contact me in writing with your disagreement within 7 days of receipt."

Close with something like, "this loan has not been repaid as agreed and, if payment arrangements are not made, I will reluctantly be forced to take legal action to enforce this loan repayment."

Keep copy and send the letter certified RRR. In any case, you should be able to use this letter to help support your claim of the existence of the loan. If she doesn't take care of this matter, go down to your local small claims court and file.

Of course, all of the above is assuming that the SOL has not expired (you didn't provide the requested dates).