Legal Question in Credit and Debt Law in California
Bad Loan to a relative
Over six years ago we made a
$15,000 loan to husband's sister and
husband. The husband has not
worked since then and the couple
moved to Hawaii to care for my in-
laws. In-laws have passed away,
with sister inheriting everything,
including property worth over
$500,000. We would like to get our
money back. What can we do? We
live in California. We have a signed
memo from them stating the loan
amount.
2 Answers from Attorneys
Re: Bad Loan to a relative
Unless they made a payment during the past four years or reaffirmed the debt in writing during that time, you're out of luck. The four-year statute of limitations in California would bar you from filing suit and collecting.
On the other hand, if you had a date certain that they were to start repaying you -within- the past four years, then you can file suit and try to collect.
Re: Bad Loan to a relative
It depends upon the terms of the loan agreement. If repayment was due more than four years ago, then you likely cannot recover, because the statute of limitations in California is four years on a written contract, with the commencement date being the date of breach or date of last payment, whichever is later.
If no payments were ever made, then we look to the date of breaach as the commencement of the statute.
The terms of the written memorandum will control, assuming that the debtor signed the memorandum.
If your debtor did not ever sign any type of agreement, and there is no evidence of any agreement to repay, then you can only look to what is called a common count. You would simply sue to recover the money you paid the debtor, maintaining the position that there was an implied promise to repay. But in this case, your statute is likely long gone, barring the claim. Because again, the statute of limitations is four years on most common counts.
Assuming you do not have a statute of limitation issue, you will have to sue where the debtor resides, unless your loan agreement has a valid venue provision providing for suit to be brought in California.