If a "friend" of mine owes me a lot of money but there is nothing in writing, can I take him to court and what are my chances to get all of it back?
Question Details:
I put a loan for a motorcycle in my name which I had to have repossessed when he stopped making payments. We wanted to start up a business, his credit was bad, so we opened a credit card in my name on which he charged a lot of money. Also, we leased a car in the business name which he drove and when he turned it back in he owed a lot of money; all of it in my name. I paid everything off with my 401K and now he hardly makes any payments. He owes me around $20,000.
Can you take someone to court for violating an oral (often called verbal) promise to repay a loan, repay amounts charged on a credit card, or pay for a car lease? Yes--courts will enforce oral agreements like these. However, there are several issues to be aware of:
1) As a practical matter, it may be difficult to prove the existence or terms of the various oral agreements to repay, especially if your "friend" now remembers the agreements differently--and also given that they are plausible explanations for why he did not pay certain charges. For example, if the car was leased by the business, it would not normally be the case that the driver would have to pay for the leasee--it's the business which usually pays.
2) Certain loans or agreements must be in writing to be enforced. States have what's called a "statute of frauds," which usually requires that agreements for more than a certain amount of money, or which will take more than 1 year to complete, have to be in writing. You need to compare your state's statute of frauds versus each arrangement or agreement to see if it was one which had to be in writing; if so, you cannot enforce it if there is no written instrument.
3) Depending on when certain of these debts were incurred, if they were too long ago, you may have exceeded the statute of limitations (SOL), or time to sue, for oral contracts; if so, you can no longer bring a legal action.
For $20k or so, it is well worth your while to consult in person, in detail, with an attorney, about the situation; but bear in mind that you may be barred from suing by 2) and 3), and 1) is a very real challenge when enforcing any oral agreement--it comes down to a case of "he said, she said," or who is more credible.


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