Legal Question in Credit and Debt Law in California

This question is in regards to about $4,000 in financial aid money that I loaned a friend. My friend owed her college about $4,000, and they would not let her return unless she repaid these funds. She spoke with someone at her college who told her that once she repaid the funds, she would be given $4,000 in financial aid money. My friend begged me to lend her my financial aid money, and she stated as soon as she received her funds, she would give them right back to me. Well I lent her my financial aid money, and she then took the funds she received and bought new clothes and laptop.

I've been trying to get her to repay me since fall of 2006. She has paid about $500. I am planning on taking her to small claims court in California, but she has moved to Portland, Oregon. Will that be an issue?

Also, will I get in trouble for loaning her my financial aid money?

Lastly, how can I recoup the interest on the loan. The $4,000 that I lent her has been growing interest ever since.

Unfortunately, I did not have her sign any paperwork, but there are numerous e-mails between us, where she apologizes for not being able to make payments.

Any advice would be greatly appreciated!


Asked on 8/16/10, 11:32 am

1 Answer from Attorneys

I am afraid you are probably out of luck. The statute of limitations for a verbal agreement to loan money, or for "common counts" for money received and due to be repaid, is two years. You had to sue her by 2008. By not doing so you lost the right to collect the money. There are some exceptions that might extend the time for you, and sometimes Small Claims judges will play a little fast and loose with the law to achieve justice, so it is possible that the judge could find a new obligation based on the promisses to repay in the emails. So it's probably worth trying a small claims case, but don't get your hopes too high. Not to mention the fact that once you get a judgement you still have to collect. Don't worry about her moving to Oregon. The loan was made in Califorina and can be enforced here if it is still enforceable.

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Answered on 8/21/10, 12:03 pm


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