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How to Collect a Large Personal Loan

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  • 08-19-2013, 02:14 PM
    tree882888
    How to Collect a Large Personal Loan
    My question involves collection proceedings in the State of: DC

    Basically, I loaned a person $20k for his refinancing, and he wrote me a note saying he would pay back within three years. (Before this, I remember I wrote a note form him saying I loan him as a gift so that he won’t pay tax). We also agreed verbally that he would pay me back every month with amount $556 per month. However, he hasn't made any payment yet. I also tried to email, call or text him and ask him to pay back, but he never answered phone. However he replied text message saying that he would be out of town for a while. I left him a voice message and tell him I will stop by to discuss with him about this, and I saw he was at home (instead of "out of town"). Apparently, he doesn't have any intention to pay back, so I am wondering if there is anything I can do.

    I also have the cashier's check from my bank. It can also be traced through the bank. The cashier's check has his name on it, with the amount of $20,000 dated on 6/18/2013.

    Please let me know what I should do at this moment if I want to get my money back.
  • 08-19-2013, 03:04 PM
    Mr. Knowitall
    Re: How to Collect a Large Personal Loan
    Why do you imagine somebody has to pay tax on a loan?

    If you characterized the loan as a gift, it's possible that your characterization of the transaction as a gift will bite you on the posterior if you try to enforce the loan in court. Gifts don't have to be paid back.

    Given the amount at issue, you can't sue in small claims court without waiving much of the balance, but if you want to try to enforce a loan and the borrower won't repay you, you would normally be looking at litigation.
  • 08-19-2013, 04:30 PM
    aardvarc
    Re: How to Collect a Large Personal Loan
    Quote:

    Quoting tree882888
    View Post
    Before this, I remember I wrote a note form him saying I loan him as a gift so that he won’t pay tax

    When someone asks you to help them screw over someone else, even the government, that should tell you that you're dealing with a person who could also be willing to screw YOU. Those are NOT the type of people you make gifts or loans to. They're the type you avoid, at all costs, lest you become their next victim. Read what Mr. K said very carefully, as your willingness to engage in bankrolling something that you were told up front was intended to be fraudulent might mean that you've kissed it goodbye, even if his tax excuse was just a ruse to get you to hand over the cash. You ARE aware that taxes pay for things that YOU use too, like roads, fire departments, etc., right? You also need to be aware that courts like litigants to have "clean hands" when seeking justice from the courts. In other words, the judge isn't going to be happy that you're complaining about him not living up to his end of a transaction when you were apparantly willing to bankroll his fraud. Next time, just say "no".

    DC is going to max any small claims award at $5k, so if you want to seek more than that, take your loan/gift agreement to a local attorney for a consultation.
  • 08-19-2013, 05:26 PM
    davidmcbeth3
    Re: How to Collect a Large Personal Loan
    stop by his house and ask?
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