If my car recently was totaled when I let my roommate borrow, how can I legally set-up a repayment plan for her to reimburse me?

I know that when it comes to insurance, I am essentially at fault and will suffer the consequences. However, my roommate has agreed to pay me back for half the cost of the car but wants to do it over time. I wanted to find out if there is some way to make a legally binding contract over a personal financial/payment plan agreement?

Asked on July 12, 2015 under Bankruptcy Law, Virginia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Yes, and it's actually easy to do: simply write up the terms of the agreement--how much is owed and the payment plan--and include in the write up that "in exchange for [your name] giving up your right to sue [friend's name], the parties hearby agree that [friend] will pay [you] as indicated in this agreement."

If the friend pays, you can't sue him. If he fails to make the payments, you can then sue for the costs/damages he caused.

The agreement should be signed and dated by both of you. Make sure you both keep copies.


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