Legal Question in Credit and Debt Law in Pennsylvania

You have 4 years from the date of his last missed payment within which to sue in PA. The reason you lent the money is irrelevant, so the fact of the bail and the car purchase doesn't matter. Rather, you lent him $5,000.00, have what sounds like an enforceable agreement to repay it, and he breached that. The simplest place to sue is your local district justice and they will have a complaint for you to complete and file. However, they may not allow you to file there as he lives in Maryland and it is a contract case. Hopefully, the contract refers to your jurisdiction which will help you file in your court. In the event they refuse to allow it, your only recourse will be to file a similar small claims case in Maryland. Kindly note that Maryland has its own SOL and you must look elsewhere to determine that answer.

I agree with Attorney Nahrgang for the most part. I don't think you can sue in small claims though because the debtor resides in Maryland. You are better off suing in Maryland small claims anyway because even if you get a judgment in Pennsylvania, the question is how are you going to collect it? Pennsylvania has no wage garnishment for this sort of thing. Maryland does. I suggest you direct your question to a Maryland collection attorney. The issue is, as noted by Attorney Nahrgang, that you loaned the money, the borrower promised to repay and signed a promissory note. He did not.

Before you sue though, you should send the borrower a demand letter or better yet, have a Maryland attorney do so. That might be enough to scare the borrower into paying. Plus, some small claims judges like to see evidence that some effort was made to collect the debt. And most importantly, in some jurisdictions, a written demand is needed in order for you to have a cause of action and start the statute of limitations running. I am not licensed in Maryland and don't know the laws in this respect. I think suing in Pennsylvania will be a waste of time though if the defendant lives in Maryland and has no assets in Pennsylvania.

Truly though, this may be a fool's errand. If the defendant was in criminal trouble and could not afford a car, what makes you think he or she has straightened out now, especially since he or she did not repay you? You might only have been the next victim in a long line of them. I would, for the heck of it, check the civil and criminal records of the county in which this person lived or had criminal charges pending. If you find a lot of stuff, you might just chalk all this up to lesson learned before you waste more time, energy and money only to not get back anything in return. Even if you decide not to hire a Maryland attorney, I would at least consult with one to find out the laws in Maryland and discuss with the attorney how collectible or not this person is going to be. If the answer is that the debtor is fairly judgment proof, then you might want to hold off suing unless it is likely that things are going to change.