What canI do ifI took a loan out formy nephew to buy a motorcycle buthe has not made any payments and has now wrecked it?

I took out a $9,000 motorcycle loan  in 2008 for my 19 year-old nephew; he said that he was going to pay for it and he didn’t have good credit, He ended up wrecking it that same week, what can I do? I’ve paid about $5,000 and he hasn’t given me a dim. He doesn’t answer my calls,text, or e-mails. He even changed his phone number. I really want to know if I can take him to court?

Asked on July 13, 2010 under Bankruptcy Law, California

Answers:

B. B., Member, New Jersey Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

I'd say you certainly can take him to court, and it sounds like you don't have any other good options here.

You'll have to persuade the court that this was a loan, of your credit to your nephew, and not a gift of the motorcycle (which is what I'd expect him to call it, if he contests the case), unless of course you were the co-signer and his name is also on the loan, which would make it easier.

The fact that he's your nephew means next to nothing here, as far as the law is concerned.  It lends a very small bit of support to the argument that this was a gift, since uncles do give gifts to nephews.  But unless you had a history of giving him lavish gifts, I doubt the court will buy it.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Do you have an agreement under which he would pay for it? If you do, you might be able to enforce that agreement--I say "might" because if it's only a verbal agreement, you may have difficulty enforcing it. Under what's called the "statute of frauds" in California, contracts that cannot be performed in one year and agreements to pay someone else's debts MUST be in writing to be enforceable. If you took out the loan, and had an oral agreement with your nephew that he would pay off the debt, and that he could do this over the course of more than one year, it may be the case that you cannot sue to enforce the agreement. If you have a written agreement, on the other hand, you would be in good shape to do so.


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