Loan from my friend

[glenn54]

What is the name of your state? Florida

I wish to borrow 15,000 dollars loan from my closest friend with 0% interest and we both have been living in Florida. I wish to pay it back in partial amounts, whenever I made some income, over the next few years. In Florida, is there any specific form for loan agreement to make this loan agreement legally binding (and if so, please provide some details on how to get it)? If no then: if we prepare an agreement with the terms and conditions acceptable to both of us and we both sign and date it on that then will it be legally binding? Do we need witness(es) signature(s) as well? Is there any legal time limit in Florida after which the agreement is invalid (I wish to include that time limit in the agreement)? I heard it is 6 years but I am not sure.

Please help move this posting to correct category if this is not the correct one.

 

[adjusterjack]

Should have been under contracts but you might as well stay here because we all read all the forums anyway and seeing a duplicate would just be annoying.

Google Florida promissory note and you'll find lots of samples. Pick what suits your agreement.

The repayment term can be as long as you both agree to. After all, mortgage loans are up to 30 years, car loans can be as long as 8 years.

 

[glenn54]

Thank you. I saw some forms. I found some forms, based on your advice. Can we modify the form by adding a statement that I can pay the loan (in partial amounts) whenever I wish, before the final deadline? In other words, can we modify the agreement (one of them available at a reliable source over the internet) to tune our specific needs?
By the way, some forms do not say about witness signatures. Witness signatures are a must or optional?

 

[adjusterjack]

Can we modify the form by adding a statement that I can pay the loan (in partial amounts) whenever I wish, before the final deadline? In other words, can we modify the agreement (one of them available at a reliable source over the internet) to tune our specific needs?

Yes, to both. You can include any terms that you can both agree on.

By the way, some forms do not say about witness signatures. Witness signatures are a must or optional?

Witness signatures are optional.

But if you feel more comfortable with witnesses you'd be better off both of you signing in front of a notary and getting your signatures notarized.

 

[glenn54]

Thank you very much.
Also I wish to borrow some money from my brother as well. He is saying that no contract is needed but just a word of mouth (oral) agreement is enough. Whether oral agreements are legally valid in Florida. I read somewhere that oral contracts are not valid unless they can be performed within 1 year from the oral contract date.

 

[Litigator22]

What is the name of your state? Florida

I wish to borrow 15,000 dollars loan from my closest friend with 0% interest and we both have been living in Florida. I wish to pay it back in partial amounts, whenever I made some income, over the next few years. In Florida, is there any specific form for loan agreement to make this loan agreement legally binding (and if so, please provide some details on how to get it)? If no then: if we prepare an agreement with the terms and conditions acceptable to both of us and we both sign and date it on that then will it be legally binding? Do we need witness(es) signature(s) as well? Is there any legal time limit in Florida after which the agreement is invalid (I wish to include that time limit in the agreement)? I heard it is 6 years but I am not sure.

Please help move this posting to correct category if this is not the correct one.

Pardon the interruption, but before you and your generous friend draft this proposed non interest bearing promissory note he would to do well to first consult with this tax advisor to determine whether it would be subject to IMPUTED INTEREST at the applicable federal rate (AFR).

See: 26 United States Code Section 7872 https://www.law.cornell.edu/uscode/text/26/7872

 

[Eekamouse]

What is the name of your state? Florida

I wish to borrow 15,000 dollars loan from my closest friend with 0% interest and we both have been living in Florida. I wish to pay it back in partial amounts, whenever I made some income, over the next few years. In Florida, is there any specific form for loan agreement to make this loan agreement legally binding (and if so, please provide some details on how to get it)? If no then: if we prepare an agreement with the terms and conditions acceptable to both of us and we both sign and date it on that then will it be legally binding? Do we need witness(es) signature(s) as well? Is there any legal time limit in Florida after which the agreement is invalid (I wish to include that time limit in the agreement)? I heard it is 6 years but I am not sure.

Please help move this posting to correct category if this is not the correct one.

0% interest on a large loan and that seems fair to you? Your friend is incredibly generous and personally, I would insist on paying him some sort of interest to thank him for that generosity.

 

[glenn54]

Thanks for the wonderful feedback you all provided. We will follow https://www.law.cornell.edu/uscode/text/26/7872 as well.

 

[glenn54]

In early 2016, I borrowed some money from my husband (to get my medical treatment, for a serious health issue, in another country as I could not afford treatment in the USA but it was getting postponed due to further health issues). We both had an agreement for that loan: a hand written agreement signed and witnessed). When I borrowed that money, my husband was already facing a lawsuit from someone. Finally, my husband lost the case as he could not afford an attorney and become a judgment debtor in early 2018. Starting from early 2017, I started paying back, in increments, the loan to my husband. Last month, I paid back the last installment of that loan to my husband and, now, I do not owe any money to him. The bank records clearly show all these transactions. We both are living on some small income my husband makes. The judgment creditor did not come for debt collection yet and he may come at anytime.



Recently I accidentally read about Florida Fraudulent Transfers 726.105 and I had no idea about it when I borrowed money from my husband (else I would not have borrowed from him), and this was the reason why I paid back money to my husband and planning to borrow from my friends.



I read 726.109 which says “Defenses, liability, and protection of transferee” “A transfer or obligation is not voidable under s. 726.105(1)(a) against a person who took in good faith and for a reasonably equivalent value or against any subsequent transferee or obligee” Are we both safe from 726.105(1)(a)? Whether the loan I paid back is treated as “reasonably equivalent value” (I paid back the whole amount but in installments). How to prove “good faith”. I read in a judgment as follows:



In Miles v. Katz, 405 So. 2d 750, 751 (Fla. 4th Dist.Ct. App.1981), the Fourth District Court of Appeal found that a preferred creditor can have knowledge that the debtor is insolvent, that there are other creditors, that the debtor is transferring the assets in an attempt to defraud his own creditors, and that the effect of the transfer of the asset will be to defeat his creditors claims. Despite this breadth of knowledge of the debtor's affairs, the preferred creditor's preferential transfer will not be voidable unless the preferred creditor (1) took the conveyance for the purpose of aiding in the fraud, or (2) actively participated in the debtor's fraudulent purpose to defeat the claims of other creditors. See id.; Malloy v. United States, 743 F. Supp. 834, 837 (S.D.Fla. 1990); Nelson v. Spiegel, 529 So. 2d 311, 312 (Fla.4th Dist.Ct.App.1988); Nelson v. Cravero Constructors, Inc., 117 So. 2d 764, 766 (Fla.3d Dist.Ct.App.1960).





726.105(b) says: “Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and…” Whether the loan payment my husband received will be sufficient to fulfill “receiving a reasonably equivalent value in exchange for the transfer or obligation”.



Although my health is not cooperating, I did some research on this matter and requesting your feedback to make sure I and my husband are OK from 726.105. Please help.

 

[PayrollHRGuy]

I don't believe 726.105 has anything to do with a loan between a husband and wife.

I am curious though. If you are both living off of a "small income" makes how did you pay him back or how you plan to pay back the $15,000 you said you want to borrow in your original post?

 

[glenn54]

Thank you and appreciate. My grand children give me money although I regret to take it from them. Local Church also helps me from donations.

726.105(2)(a) specifically states about money transfers to insider (and I read at several places that the spouse is an insider and ) and I am still concerned. Therefore, some specific answer on the following two would be highly helpful:

(i). I read 726.109 which says “Defenses, liability, and protection of transferee” “A transfer or obligation is not voidable under s. 726.105(1)(a) against a person who took in good faith and for a reasonably equivalent value or against any subsequent transferee or obligee” Are we both safe from 726.105(1)(a)? Whether the loan I paid back is treated as “reasonably equivalent value” (I paid back the whole amount but in installments). How to prove “good faith”.

(ii). 726.105(1)(b) says: “Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and…” Whether the loan payment my husband received will be sufficient to fulfill “receiving a reasonably equivalent value in exchange for the transfer or obligation”.

 

[Zigner]

Wow.
The interest can be considered a gift. It's really not some big thing here folks.

 

[glenn54]

Thank you and appreciate. Still I am concerned about how to prove “good faith” in my first query and “in exchange” in the 2nd query, if the judgment creditor claims that it is fraudulent transfer.

 

[Zigner]

Thank you and appreciate. Still I am concerned about how to prove “good faith” in my first query and “in exchange” in the 2nd query, if the judgment creditor claims that it is fraudulent transfer.

Huh? What does YOU borrowing money have to do with a fraudulent transfer?

 

[LdiJ]

Huh? What does YOU borrowing money have to do with a fraudulent transfer?

To summarize. OP borrowed money from her husband while he was a defendant in a lawsuit to get medical care in another country. When she realized that could potentially be considered a fraudulent transfer she gave it back to him.
She now wants to borrow money from a friend instead to get her medical care, but she is still worried about that previous loan from her husband, even though she paid it back.