What legal action can I take against a person who’s in a different state that received a loan from me but now refuses to pay it back?

UPDATED: Apr 18, 2012

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What legal action can I take against a person who’s in a different state that received a loan from me but now refuses to pay it back?

I have this friend who asked me to purchase a computer for them with my credit card now they are refusing to reimburse me for the money spent. Am I able to take legal action to order them pay?

Asked on April 18, 2012 under Bankruptcy Law, Virginia


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If there was an agreement to repay you--i.e., you can show that the money or payment made (using your credit card) on that person's behalf was not a gift--you could sue for the money's return. You may do so even if the agreement to repay was oral; oral agreements are enforceable, though as practical matter, it is more difficult to show the existence and terms of the agreement if the other party to it "remembers" things differently.

You should be able to sue in your own local courts, since the court where someone suffered financial injury should have jurisdiction. That's the good news. The bad news is:

1) I don't believe you can sue an out-of-state defendant in small claims court; you'll need to go the regular county court, which is more expensive and more complicated than a small claims action.  Between that and the additonal complications of suing an out-of-state defendant, you may effectively need  an attorney (rather than representing yourself, as you could easily do in small claims), which may mean that it is not cost effective to sue.

2) If you sue and win but your friend does not pay, you'll have to then enforce the judgment in his or her home state or where he or she owns property. As with suing an out-of-state defendant, enforcing judgments against out-of-state defendants is more time consuming, complicated, and often expensive, too.

Depending on how much is at stake, even though you legally could sue, it may not be worth it.

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.

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