Legal Question in Civil Litigation in California

loan and colateral

I loaned a friend money and I was

given a musical instrument as

colateral which was equal in valure

to the amount loaned. After losing

contact with the person, I sold the

musical instrument for less money

than the amount of the loan. Now I

am in contact with the person who I

loaned the money again. Can I still

collect the difference in the amount?

(loan was $1000, sold instrument

for $500) Does he still owe me the

$500? The loan was verbal.


Asked on 2/01/07, 9:41 am

1 Answer from Attorneys
Steven Lynes Lynes & Associates

Re: loan and colateral

There is no prohibitation against verbal loan agreements, nor are you limited in recovery to the collateral (unless that a term of your verbal agreement). Statute of limitations on breach of verbal agreement is 2 years from breach. Recommend that you go the Small Claim Court route to get your $500, plus some interest.

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Answered on 2/07/07, 6:53 pm


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