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Posted: 5/14/2002 7:31:18 AM EDT
[#1]
At the end of the 30 days, was the $3k reinvested at some interest rate? There's nothing wrong with the document - at least you got it in writing.
He's in breach of contract, which in Illinois is under a 5 year statute of limitations. I don't know what the limit is in Virginia. In Illinois, you could take him to small claims court because the amount in controversy is under $5000. If you can do this, it's a good way to go because you can get a quick resolution and you can represent yourself. You could ask the court to award you the $3,600 plus your costs in prosecuting the claim, like your filing fee and whatever it cost to get deadbeat served with a summons. Edited to say - That'll be $150.00. You can pay me by check. [;D] |
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Posted: 5/14/2002 7:42:04 AM EDT
[#2]
i'd agree with everything eswanson said on the surface, with the HUGE caveat that [b][size=4]you really need to consult a lawyer[/size=4][/b]. there's no excuse not to. how can you bitch about a couple of hundred dollars that it might cost you to get $3600 back.
at least you got it in writing. there are a couple of dozen other details that could render the contract void, voidable, or unenforcable (depending on the nature of the detail). you need to talk to a lawyer. you don't necessarily need one to represent you in court. |
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Posted: 5/14/2002 8:13:55 AM EDT
[#3]
This investment to be used as working capital will return an interest rate of 20% over the period of 30 working days to the above named person. You might want to check your state laws on interest rates. Twenty percent interest over thirty days equals about 240% per year and might be considered usurious in your state. That would make it an illegal , and thus unenforceable, contract. In the future you might want to phrase it as a $555 "handling charge" plus 1.5% per month, i.e., $45 on $3000, for a total of $600 return on your money. I'M NOT A LAWYER, so check all this out. Good luck! |
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Posted: 5/14/2002 8:22:40 AM EDT
[#4]
As hardcase said, you have probably violated usery laws with the interest rate. HOWEVER, you can still recover the principal in small claims court.
Also, getting a judgement isn't the same as getting your money. You still have to expend a lot of effort to actually collect on that judgement and that may end up costing you more than $3k in time and cost, if you are even successful. Absolutely consult a lawyer if you can do so for free. He will probably tell you that it will cost you more to collect than to just eat it though. Hey, go on Judge Judy![;D] |
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Posted: 5/14/2002 8:41:30 AM EDT
[#5]
Sorry to hear about the misfortune Chimborazo.
Hope it get worked out. Good luck. |
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Posted: 5/14/2002 10:13:02 AM EDT
[#6]
Thanks for all the replies.
[b]eswanson[/b], the money was not reinvested after the thirty days. Another agreement was never drafted...he just failed to pay me back. Your consulting fee check is in the mail.[:D] [b]hardcase[/b] and [b]FMJunkie[/b], I hadn't thought about that. It probably is illegal. Does that mean that I'm not even entitled to get my initial investment of $3000 back?[V] [b]ARLady[/b], I think I will consult a lawyer. I called him again today and if he doesn't call me back, I'll get a lawyer to look at the situation. [b]satcong[/b], thanks for the kind words. Again, thanks for the advice everybody. -Chimborazo |
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Posted: 5/14/2002 10:47:55 AM EDT
[#7]
Quoted: [b]ARLady[/b], I think I will consult a lawyer. I called him again today and if he doesn't call me back, I'll get a lawyer to look at the situation. i wanna apologize for the uppity tone in my first part about consulting the lawyer. didn't mean to come across that way. just read it again and realized that i hate the internet cuz it can't convey tone of voice. hope i didn't irk you. |
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Posted: 5/14/2002 11:00:40 AM EDT
[#8]
I used to do some collection work when I practiced in Chicago, so I have some idea of what you need to do.
Frankly, the only way this is going to be worth it to you is if you do it yourself. You are not going to get back your attorney fees, win or lose. I suspect that your "friend" does not have the money, or he would pay you back. Thus, even if you get a judgment, you still have to collect. This can be difficult unless he has money sitting in a bank account that can be garnished. Instead, you will have to foreclose and sell his property (tools, cars). In all liklihood he will come up with the money once you make his life difficult. Your written agreement should be enforceable (at least the principal amount). Feel free to e-mail me if you need help. [email protected] |
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Posted: 5/14/2002 11:08:29 AM EDT
[#9]
ARLady, not at all. Besides, I could use a little kick in the ass over this thing! BTW, another congrats to you on your real estate exam!!
slefelar, how does one foreclose on property without a legal judgement? You think I should just hardball him until he pays up? It really burns me up when I see him and his wife out drinking. They go out EVERY NIGHT!! People I know mention it in passing (nobody knows he owes me money). Thanks again. |
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Posted: 5/14/2002 11:13:58 AM EDT
[#10]
I agree, it's tough to get a lawyer too interested in a $ 3000 case. I might do it if I knew you, had other business from you and I'd still probably want 1/3+ (assuming you wouldn't want to pay a retainer)and then only if I thought I could collect from this guy easily-the only easy way to collect is once you get a judgment to seize this guy's checking account (at least in NY). I'd guess he's "self employed" so you can't garnish his wages. It doesn't hurt to talk to an attorney, but small claims court may be the way to go.
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Posted: 5/14/2002 11:45:58 AM EDT
[#11]
Here in Californistan a case that small could be handled in Small Claims Court, in which people rarely use attorneys. Filing is brain-dead simple, and the judges and clerks will bend over backwards to help the winner collect.
Is there a similar system in VA? |
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Posted: 5/14/2002 11:57:27 AM EDT
[#12]
Here's another vote for Small Claims Court and no lawyer. Get a book on filling, it will give you all the info you need. Ask for the total amount, after the guy is served offer to accept just the principal if he pays before the court date, he may jump on that. If you have to go to court you probably won't get the interest anyway.
Be sure to check on the statute of limitations, you want to file before it ends. As for the legality of the contract, it's small claims. Basically they will determine if there was an agreement and if he is in default. They won't tear your contract apart and jump on the "loan shark" fee if you can state you offered to accept just the principal. The judge will either reduce the owed interest, throw it out all together, or say $600 is fair for a $3,000 debt over the course of two years. You have an excellent case for small claims. I would hope the filing would prod the guy into paying before the court date, less hassle. If he doesn't I'll be surprised if you don't win but you will have to probably file a lean on his company, house or something. There is also a way to sieze any company property such as tools and sell them to get your money back. If you get more than what you are owed you have to return the extra $. |
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Posted: 5/14/2002 12:35:10 PM EDT
[#13]
If you are still on semi-decent terms with this mooch, just go to his house and have a few beers (which you will probably have to bring).
Lift his car keys and drive his car/truck/whatever away. Offer to let him have it back for the $3000 he owes you. Now THAT'S hardball. A little bit anyway. |
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Posted: 5/14/2002 2:40:50 PM EDT
[#14]
It looks like you made a very good investment, indeed!!
Since your "friend" failed to pay you after the first 30 day period, we can assume that he merely rolled over the the principal and interest at the same rate. That means as of May 6, 2002, your "friend" owes you $198,742.11. On June 6 the total will be $238,490.54. My advice is get a lawyer and take this guys house, and everything else he owns!! |
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Posted: 5/14/2002 4:40:28 PM EDT
[#15]
Regarding collection problems: Look into filing a lien against the specific house he was renovating or other houses where he has used the equipment you help pay for.
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Posted: 5/14/2002 4:43:28 PM EDT
[#16]
Quoted: It looks like you made a very good investment, indeed!! Since your "friend" failed to pay you after the first 30 day period, we can assume that he merely rolled over the the principal and interest at the same rate. That means as of May 6, 2002, your "friend" owes you $198,742.11. On June 6 the total will be $238,490.54. My advice is get a lawyer and take this guys house, and everything else he owns!! I think thats a little bit too far, |
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Posted: 5/14/2002 4:47:56 PM EDT
[#17]
About the "usurious" interest rate - whose idea was it? If it was yours, then it can be very easily taken as usury. If it was his (offered freely) then you can probably make it happen.
Somehow, tho, I have a hard time believing that usury statues can apply to a contract entered willingly... Stupid question - is it signed AND notarised? Just signed, both parties? Just a paper with no sigs? Just wondering... It does otherwise sound like a Small Claims case. If you get it to court (and win!) I would also look for lien authority so you would have a second course of action in the event of non-payment (which seems to be more common than one might think...) I am not a lawyer - don't even play one on TV! Take this "advice" in the spirit in which it is offered... FFZ |
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Posted: 5/14/2002 6:43:16 PM EDT
[#18]
Consult an attorney and then small claims court. You should be able to get a judgement. Then you can put a lein on his vehicle/other tangible property that he might want to sell in the near future. If you have a judgment and know where he banks, you can have funds seized. If he works as an employee for another business, you can have a garnish done. Another angle that is a little more devious but seems legal is this - if he doesn't pay/won't pay/can't pay, tell him that you are going to forgive the debt and show it on your income tax and report it to the IRS. They WILL expect him to pay taxes on this. This is an angle that some businesses are using to make the deadbeats pay up. They'd rather pay the debt than deal with the IRS.
Good Luck. |
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Posted: 5/15/2002 5:59:37 AM EDT
[#19]
Thanks for the replies everyone. The whole thing (amount of money, rate, time period, etc.) was his idea. He approached me about it. As for the contract, we both signed it, but it is not notarized. I like the IRS idea if he doesn't pay.
Thanks again. |
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Posted: 5/15/2002 6:47:34 AM EDT
[#20]
Chimborazo
hardcase and FMJunkie, I hadn't thought about that. It probably is illegal. Does that mean that I'm not even entitled to get my initial investment of $3000 back? It MAY mean that you cannot get your principal back either, if the usury laws are interpreted strictly, but if you go to Small Claims court the judge may overlook it. Again, I'm not a lawyer, but it seems like judges are trying to be fair in these things. Here's another idea: Approach your "friend" & propose a payment program of $300 on the first of each month with a good faith first payment of $600. Give him a few days to think about it & call him if he does not get back to you. If he blows you off again, then file. You might even want to charge him interest for the two years that he is over due & the amount of time that it takes to pay off the debt, maybe 1.5% per month on the outstanding balance. Be sure to apply the payments to the interest charge first. Example: $3600 X .015 = $54 interest $300 - 54 = $246 toward principal Of course the original $3600 at 18%/year (1.5%/ month) would be over $5000 right now. Another idea: Go to the bar that he frequents & sit directly across the bar from him & rub your thumb & index finger together periodically. You know, like you see in the movies. Be a minor PITA. |
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Posted: 5/15/2002 7:31:55 AM EDT
[#21]
I don't know your laws, but I suspect that the interest won't hold up.
The pro per filing is a good idea, your case is fairly simple and you should be okay. Even better would be to go to a local attorney and offer him two or three hundred to sue and skip discovery. Something else you may want to do is if he used the 3k to buy any equipment you should do a UCC filing with the state. That will put you in position one or two for a claim on that stuff when he goes down the drain. |
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Posted: 5/15/2002 7:41:30 AM EDT
[#22]
I do these agreements for business deals all the time.
The promissary notes end up being 5-6 pages, plus personal guarantees on the deal of another few pages, plus a mortgage and/or security interest for another 5-10 pages, plus I have been sneaking in a confession of judgment with some folks on the other side. You should have a stack of papers numbering at least 20 pages whenever you loan money. Otherwise you will be the loser. |
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Posted: 5/15/2002 12:38:19 PM EDT
[#23]
Well, I finally talked to the guy today, and he said his van was broken into and a lot of tools were stolen. He said the insurance check should come tomorrow or Friday, so I may get some money. I say "may" because he has been full of shit thus far. I told him he had until the end of the month to pay me in full before I filed. Just wanted to let him know I was serious about this. In the meantime I'm going to consult a lawyer. Thanks for all the advice. I hope I get my money soon.
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Posted: 5/15/2002 12:55:44 PM EDT
[#24]
Quoted: go to a local attorney and offer him two or three hundred to sue and skip discovery. quote] He he yer kiddin' right (I hope [:o])? Even I won't sue someone for $ 200; that's more like speeding ticket money. This may vary by area, but often when you are getting a lawyer for a "too good to be true" price you'll be lucky if you get a lick of work out of the guy. There are some guys out there who will take a case that cheap and do a good job (maybe a young guy just starting out without a secretary looking to make a name for himself get connections in the community)-but I would guess they are the exception, not the rule Chimborazo-Sounds like a cock and bull story to me. I'm cynical because I have heard it all, but deadbeats are often masters of the "Money right around the corner" story. Insurance settlements, worker's comp payments, inheritance blah blah every deadbeat has a big pile of cash that'll be here in just a week-month-two months etc as long as you leave him alone for now. Edited to ad-ask him for a copy of his insurance claim of the number of the insurance adjuster so you can check on it, a copy of the police report regarding the stolen tools, a copy of his insurance policy, does he mind if you call the insurance adjuster or agent to see when the cash is coming.... Good luck to you, 3k is a lot of cash to have a friend screw you out of. |
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Posted: 5/15/2002 1:41:26 PM EDT
[#25]
Sorry if I wasn't clear on my first post. You need a judgment before you can garnish/sheriffs sale, etc. My point was paying a lawyer to get a $3000 judgment that may be worthless or uncolectable does not make sense. You can get the judgment yourself. Collecting is the hard part. If you can find out where he has his checking account, you will be way ahead of the game.
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Posted: 7/29/2002 12:12:29 PM EDT
[#26]
Well, the lawyer that did my house closing said he would do it for 1/3, with no up front costs. If he gets nothing, the only thing I can lose is the court costs...$24. Is one-third reasonable? So if I get the full amount ($3600), then he gets $1200. Can I take him to small claims after that to try and recover my legal fees? I forgot to ask my lawyer.
Thanks, Chimborazo |
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Posted: 7/29/2002 12:44:06 PM EDT
[#27]
Ha!! Speak of the devil. The bastard just called me. The money's just around the corner, as always. I didn't tell him I'm suing him though. He's faxing me his home equity line papers tonight (so he says). I figure this will give me more info to pass to the lawyer when he inevitably calls me with an excuse next week. What a loser.
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Posted: 7/29/2002 2:29:20 PM EDT
[#28]
Sounds like a good deal. Make sure that the costs come out of his end. Motions and writs also cost money.
Ask if he will go 25% before you agree, it can't hurt to ask. Unless your state's law is very different, you can't recover attorney's fees unless there is a provision for them in the note. |
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Posted: 7/29/2002 2:44:14 PM EDT
[#29]
I doubt you can get your legal fees back. Also you only get one shot at him usually, no going to small claims court later for a mop up operation.
I normally tell people to make sure the attorney you are hiring does this kind of work regularly, this guy may do house closings but does he go to court and fight over $ 3k cases? But this is such a relatively small amount of money I'd say if you like this attorney tell him to go after the SOB. I'd say 1/3's right. You do need to sort of know about costs. I take the costs off then divey up the money i.e. $ 1000 recovery - 100 costs (paid back to you 'cause I sure did not front them) = 900 recovery /3=300 for Aimless. DON'T tell the turd you are suing him!!! He will hide and not come to the door, increasing what the process server charges you. You think it would be obvious that you should not tip the victim-oops defendant [:)]-off, I have found that to some people it is not obvious. |
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