What to do if I loaned a friend $20,000 and had him sign a contract but he stopped paying?

The contract stated that he had to pay it back in 90 days; that was 3.5 years ago. He has only made 10 payments totaling $5000. I know that my legal right to pursue this debt in court expires 4 years from due date, which is up in 6 months. I am sure that he is aware of this. My problem is, do I ask him to sign a new agreement which I take the chance of him stopping any payments on going forward if he refuses, or just let it expire and continue taking payments as he gives them, therefore losing my legal right to collect after 4 years?

Asked on January 8, 2013 under Bankruptcy Law, California

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

First you need to make sure that the agreement is valid and will stand up in court because that is where you need to be - in court.  You have given this friend enough time to pay back and he is obviously in breach of the agreement.  It is time that you acted on same.  Do not wait any longer.  Good luck.


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