Is there a statute of limitations on a personal loan?

If 2 states are involved, which state do you file a small claim in? I made a personal loan to my in-laws who live in another state and now they are denying that they ever borrowed it. It has been 4 years so I am worried it is too late to do more. I would have acted sooner but was being told that it was being handled over the years by my husband to just find out that it was not. I obtained the check records from my bank showing that it was signed by one of them (I had a signature on file to compare it to) and it was cashed at a specific bank in their state, but they are still acting aloof.

Asked on September 6, 2010 under Bankruptcy Law, Minnesota

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Yes, there is a statute of limitiations on a personal loan, as there is on any debt. The statute does not run from when the loan was made, but rather from when the default happened--e.g. from when the borrower first missed a payment. In terms of which state's statute applies, that is a fact-by-fact question; depending on the circumstances, probably good arguments could be made to sue in either your state or theirs. You should consult with an attorney immediately, before any more time passes, to see (1) which state(s) you could or should file suit in; and also (2) whether you are still within the statuute of limitions. The attorney can also evaluate the evidence you have as to how strong you case is; for example, if all you have is proof that the relatives cashed a check, that doesn't answer the issue of whether it was a loan (they have to repay) or a gift (they don't).


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.