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When it comes to a friend lending money to a friend, the risk of not getting paid back is extremely high.
Why?
Well, because the borrower feels less pressure to pay back the lender, after all, they are ‘friends’, and TRUE friends are supposed to understand.
The way I see it, TRUE friends are not supposed to burn each other, and if you cannot trust a friend to pay you back the money you loaned out as agreed, then that person is not your friend, and it is time to take this person to court.
After you have repeatedly asked your ‘friend’ to pay you back and have reminded this person that the money they accepted from you was not a gift, and if your friend continues to offer excuses or just outright avoids your calls, it may be time for legal recourse.
THE FIRST STEP you need to take is to gather all the information related to the unpaid loan;
- Promissory Note or Loan Agreement
- Correspondence – emails and voice mails
- Documentation – letters – notes
- Witnesses that can confirm the loan agreement
NOTE: The court system does not operate on ‘feeling’ or ‘emotion’, usually. The court system relies on facts, on information that can be physically proven. The fundamental rule; if it cannot be proven in writing, then it did not happen.
THE SECOND STEP you need to take is to contact your local small claims court division in the county where the loan was made.
Filing your claim where the loan was made is extremely important for jurisdiction purposes. Not doing so may cause your claim to be dismissed by the presiding judge.
A claim may be filed for up to four years after a loan has gone unpaid, however, please check with your local small claims court division where the loan was made for verification.
Also, ask the small claims court division if there is a dollar limit for your claim to be heard, along with any other filing procedures.
All small claim court divisions have a dollar limit for filing small claims, usually between $5000 and $10,000, depending on the state rules.
If your claim exceeds the limit amount set by the courts, then you are going to need to contact an attorney to represent you in a civil court setting.
Make sure that you inquire about lawyer fees and then determine if the lawsuit will be worth your money and time. This type of lawsuit may get expensive if the case drags on for a lengthy period of time.
THIRD, file your complaint with the courts.
Include;
- Total dollar amount due
- Name of the person or persons on the loan agreement
- Copies of the Loan Agreement
- Additional damages or fees
Once the complaint is filed, the Court Clerk should provide you with a court date.
FOURTH, serve the Defendant the complaint by Certified Mail or hire a Process Server.
FIFTH, PREPARE FOR COURT.
Good Luck.
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