Legal Question in Credit and Debt Law in California
Hello I have a question regarding a verbal contract in the state of California.
My ex-wife and I had accumulated upwards of $10,000.00 in debt and her parents gave us the money to pay off our debt and said, " don't worry about paying us back, pay us when you can"
Now that we have gone through a divorce, her parents are demanding that I repay $5,000.00 of the loan immediately with new stipulations. (Late payment fees, minimum payments, past due payments). There was never any signed contract nor verbal agreements on when I would pay, how much I would pay, nor late fees being assessed.
I plan on paying the money back, but in my current financial situation I can't start making payments. Does he have a legal right to take me to court as I haven't violates the terms of our oral agreement?
2 Answers from Attorneys
Almost certainly. However, it seems clear that the attempt to collect late payment fees will succeed only if the proof is clear that your parents demanded them in the oral agreement (which you seem to indicate they did not).
I suppose you should look at issues of statutes of limitations, depending on when the loan occurred. The debt is also a community debt, and arrangements should have been made as to its payment between you and your former wife.
This debt should have been included in the divorce as to its division. Paying them back "when you can" may have made this illusory but courts will tend enforce contracts. If you are to pay them back there must be a good faith effort. Saying that you plan on paying them when you have the money is probably not good faith.
You should really figure out this needs to be divided, but they can sue you over it.
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