How can we resolve a debt issue with a family member when they don’t have any legal documents?

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How can we resolve a debt issue with a family member when they don’t have any legal documents?

My husband and I have been together for 5 years. Since I first met him, he “owed” his mom $20k from the span of him being 19-25 because she bought him a couple of cars; he is now 31. We have only been married for 2 years and now both of our money is combined so my money is also going towards his debt and apparently he still owes $20k even after paying on it. I have asked numerous times for documentation of what was bought for him, how much it costs, and where the money is going when we give it to her and she won’t give it to me, how can I get out of this legally if she won’t show proof?

Asked on March 12, 2011 under Bankruptcy Law, Missouri

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Well, you can not really "get out of this legally" as you put it unless you deny the terms of the agreement, and no attorney will ever tell you to do that.  So here is what I suggest.  Gather together all the documentation as to the payments that have been made both by your husband alone and you jointly. Then send her a letter documenting the payments made on the $20K and indicating that according to your records the debt is now $X.   Did you (or he) agree to pay interest in the "loans"?  That may be an issue.  Since she is also technically a creditor you can ask her to "validate" the debt which is basically showing proof.   If she will not then you could stop paying and wait until she sues you.  Then she will indeed have to show proof.  Not an avenue I suggest, though.  Good luck.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

1) Oral or verbal agreements are enforceable, though proving them can be difficult.

2) Someone only has to pay the amount he or she agreed to pay (e.g. that amount of principal, plus agreed upon interest and fees). The lender can't keep increasing what's owed beyond what's agreed upon, so, for example, if you know how much was borrowed at what interest rate and how much has been paid, you can figure out how much more is owed.

3) If the money for the cars was a gift, there's no legal obligation to repay at all.

So, if you think that either the mother is charging you amounts that your husband never agreed to pay (so, for example, maybe he's already repaid it all; or if anything is owed, it's less than she says) or that the money was a gift in the first place and shouldn't  be repaid, you basically have three options:

a) Don't pay, and force her to sue you for the money, at which time she'll have to prove the existence and amount of the debt--the burden of proof is on her (and you can also present contrary evidence);

b) Pre-empltively bring your own action for "declaratory judgment," seeking to have a court declare the exact amount (if any) still owing, based on whatever evidence and testimony there is of the debt or gift; or

c) Negotiate some settlement with her to put an end to this.


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