Legal Question in Credit and Debt Law in Illinois

Interest on verbal family loans

My friends son passed away in 96. My friend paid $1000 to the furneral home on account for the funeral of his son. The sons daughter (grand daughter of my friend) came forward and said that she would take care of her fathers furneral. She stated that she would pay her grand father back as soon as she could, the $1000 the grand father paid on account. Now this was a verbal agreement between the two of them. Its now going on 4 years since the funeral and the grand daughter hasn't paid one dime to her grand father. My question is "can the grand father charge interest on this $1000 and how much interest?". He reallizes that this was a verbal agreement between him and his grand daughter, but he wants his money. If he had left this money in his savings account, he would have made interest on the sum.


Asked on 1/26/00, 7:11 pm

1 Answer from Attorneys
Thomas Moens Moens Law Offices, Chartered

Re: Interest on verbal family loans

Wow! I wouldn't want to be at their house for Christmas. The basic rule is, you can't collect interest or attorneys fees on a debt, unless there was an agreement between the parties that such amounts would be added to the debt. If your friend gets a judgment against his granddaughter (ugh), he may be entitled to post judgment interest, which varies by jurisdiction.

For what it's worth, my money loaning rule is: Never loan money to family or friends unless you do NOT expect to get it back. Whenever I loan money to my family or friends, I look at it as a gift, and don't expect to get it back. If I happen to get it back, it's like getting a gift. I have seen more friendships and families torn asunder by not following this simple rule. Family and friendship is certainly worth more than any amount of money.

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Answered on 1/27/00, 8:56 am


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