What to do about a family loan and getting repaid?

I have been living with my family for several years and have been paying rent since I turned 18. However, I have also been allowing my family to “borrow” money. Over the course of 3 years the amount “borrowed” has accumulated to slightly over $20,000. I fear that they have no intentions of paying it back to me and have been recently kicked me out of the house due to my refusing to pay them more money via borrowing. I have been keeping notes of the amount borrowed, the date and the reason behind why they wanted to borrow or a significant event that happened to help them remember the day. I did not get a signature from them. Can I take them to court for this?

Asked on September 17, 2014 under Bankruptcy Law, Hawaii

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

You can try to sue them: an oral (or verbal; i.e unwritten) agreement to repay a loan is enforcable. The problem may be proving it: for money to be a loan to be repaid, and not, say, rent or a gift, both parties must clearly understand when the money was given that it must be repaid, and there must have been repayment terms (i.e. when it was due; any interest; etc.) If there was no agreement as to those terms, or if the family will simply lie and claim the money was gifts or rent, a court may conclude that the money was gifts or rent, not a loan. The facts do not help you: you have clearly been paying rent to your family, so the money could be additional payments; the payments were made to family with whom you live, so it could be gifts. This is not to say that you can't win, or shouldn't try, but the lack of a written agreement in a case like this definitely hurts.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.