If I lent $10,000 to a friend as an interest-free loan for 6 months, what are my legal rights to collect?

Get Legal Help Today

 Secured with SHA-256 Encryption

If I lent $10,000 to a friend as an interest-free loan for 6 months, what are my legal rights to collect?

We have a notarized hand-written contract to that extent. The contract does not state the term of the loan. It does state that in case of borrower’s death the money will be repaid to me by his son or wife. He told me it would be out of his life insurance policy but that is not stated on a contract. What are my legal options to collect the debt? The borrower collects a disability check and does not have employment.

Asked on February 21, 2012 under Bankruptcy Law, Illinois

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If you lent $10,000 to a friend as an interest free loan for a period of six (6) months, then the friend is obligated to repay you the $10,000 in full within this time period. If the friend is unable to do so, I recommend that you at least get a portion of the amount repaid at the end of the time period and then have that person sign a promissory note to you for the balance payable in a set time period at so much interest accruing with so much paid monthly if you desire.

Or, if your friend cannot pay the full amount back and you are unwilling to extend time at the end of the six (6) month time period, your recourse would be a legal action.


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.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption