If I took out an auto loan for my dad and had a verbal agreement that he would pay. but he has not, can I sue him?

Can I sue my dad because he has gone back on a verbal agreement? I took out an auto loan in my name for him. He has not been paying on time and neglected to provide proof of insurance so the loan company charged fees. Now the loan pay off is a few 100 shy of how much we originally took out the loan. This has also caused my credit score to significantly decrease. What can I do?

Asked on March 24, 2012 under Bankruptcy Law, Texas


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

You might not be able to sue your father. The "statute of frauds" in Texas, which I think is codified in Title 3, Chapter 26, section 26.01, states that an agreement to pay another's debt must be in writing to be enforceable. From what you write, you took out the loan--it is your debt. Your father's promise to pay would seem to have to be in writing to be enforceable. (Note: if you had yourself directly loaned him the money on an oral or verbal agreement, that would be enforceable--oral loan agreements are valid; the problem here is that you took out your own loan, or debt, on behalf of your father, which is legally a different situation.)

It would be worthwhile consulting in detail with an attorney about this: the specific facts of each case are critical and may provide a way around the above; for example, there are other theories, like unjust enrichment or promissory estoppel, that may give you recourse, even though your father's oral agreement is not, on the face of it, enforcable. However, you have to be prepared that you may not be able to enforce your father's unwritten agreemen to pay your loan.

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