Cana loan agreement be rewritten4 years later?

UPDATED: Jul 14, 2010

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Cana loan agreement be rewritten4 years later?

I loaned an individual $3,000 to help save their business. The date the loan was made is 3-17-06. The written loan agreement gave the individual six months(9-17-06) to pay back the loan. As of today, I have received no payment at all. If I understand California law concerning this, I have four years from the due date to pursue legal action or forfeit that right. Is it legal to write a new loan agreement to replace the existing agreement ? I am reluctant to take legal action if there is another way.

Asked on July 14, 2010 under Business Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

If your question is, can the two parties to a loan agreement write a new loan agreement to replace an old one? The answer is yes, just as the two parties to any contract may agree to extend, alter, replace, modify, etc. it. (A loan agreement, when you get down to it, is simply a contract, after all.) However, before doing this, ask yourself: will rewriting the agreement actually do anything for you? If the other party has not paid by now, why do you think they will pay later? That does not necessarily mean you should sue--it may be, especially if the other party has only limited or no assets, that suing will cost more than you can effectively recover. However, unless you can think of a reason why you believe circumstances might change in the future, it probably makes sense to either sue now or to write off the loan now and take a tax loss of some kind (speak to a tax preparer or accountant about what kind of a benefit you may be able to get).

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 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.

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