Is it true that a debt of more than $500 must have a written contract in order to be legally enforceable?

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Is it true that a debt of more than $500 must have a written contract in order to be legally enforceable?

I was given some money to help me out of a financial situation. I verbally agreed to pay it back but I didn’t say how much monthly or how long I would take to pay it back. I started paying $200 per month in January of this year. When I missed April’s payment a court case was filed after several harassing nasty phone calls and text messages. I plan on getting the case and answering it. However I was wondering what legal ramifications this may carry as I do not want my check garnished or credit damaged by a judgement being rendered.

Asked on April 18, 2011 under Bankruptcy Law, Georgia

Answers:

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

Answered 10 years ago | Contributor

The theory of law that you are alluding to here is known as the Statute of Frauds.  It means that certain agreements must be in writing in order to be enforced under the law.  Generally speaking, contracts for the sale of real property have to be in writing in order to be valid. As for the issue you are asking about, it may be state specific so I would double check with an attorney in your area.  The matter can come up under many areas of the law: landlord tenant proceedings, contracts, real property, etc.  If the matter is not governed by the statute of frauds then the enforcement of an oral contract is what would be happening.  And if the other party can prove it then a judgement can indeed be rendered against you and collection in any form the state allows.  Get help.  Good luck.


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