What can I do if someone owes me $35,000 and I don't have anything in writing. I do have a copy of the check

Question

My husband let a family member borrow $35,000 with the understanding that he would receive $60,000 in return. He wrote a check to this family member against our home equity line but did not get it in writing (bad mistake). This person is no longer returning any of his calls at this point and it has now been just over a year. We live in Michigan and wanted to know if anyone knew of any legal recourse that we could take.

Thanks for any help

Answer 1

IF he wrote on the check that acceptance of this check constitutes a loan, or something to the extent that it was a loan and/or you expect to be payed back, then he could go after them. Without that, it is assumed a gift.

IF this is not the case, at least report that person to the IRS, there are limits to gifts before they are taxable - you may not get any of the money back directly, but you could at least get revenge by sicking the IRS on them. Part of the taxes and interest and penalties woud come back to you if you get a refund, so think of it that way.

Lawsuits will not help without a paper trail, especially if it is a family member. You could always roll the dice and make it painful for them by dragging them into court and make them pay for an attorney. Again, another way to get them to cough up some of the money you threw away. Depending on where you lived at the time of the loan, that state takes precedence, so maybe they will have to travel and pay for a hotel for the precedings, unless you are also willing to put them up while you are suing them.

Good luck.

Answer 2

$4

Answer 3

Unless you have a witness to the verbal contract, or the family member admits to the verbal contract, you could be out $35,000. Your best bet is to contact an attorney.

Even if you do find someone to take the case and sue for the money, you will probably not get the $60,000 as that will probably be considered excessive interest on a loan.

Answer 4

Money give to a family member is a GIFT until proven otherwise. Unless the check states on its face this was a loan, it is your word against the borrower's.

Gottanew is DEAD wrong about gift taxes. The limit is currently $12,000 and YOU pay gift taxes on the excess. That said, your failure to file a gift tax return my be your best evidence that the money was intended as a loan. On the other hand, most states require contracts over a certain amount to be in writing to be enforceable. $35,000 probably exceeds that amount.

Answer 5

Lots of lazy people giving you lazy advice about using the courts. Don't throw good money after bad.

You need to buy an airplane ticket and go and see these relatives. You need to have a plan before you go. You have to look them in the eye and find out why they are not paying and why they are not talking to you. Get a conversation started. Find out the situation. Once you have the facts you can start to work out something with the debtor/relative. Find out if they are willing to start paying a small amount every month. Find out if they have something they can sell to start to pay you back. Don't even think about getting $60,000, work towards getting your $35,000.

Are there other relatives in the picture? Maybe the deadbeat shares a relative with your husband who may be planning to leave the deadbeat an inheritance at some point in the future. You may be able to get him to assign his rights to that inheritance.

This is a negotiated workout of a debt at this point. If you choose to be antagonistic at this point and include attorneys you will get screwed. Find out how you can solve the relatives problem so he can solve your problem of getting paid.

Good luck.

Jim

Answer 6

Perhaps if you inform him that if he does not make payments, you will be forced to report the $35,000 to the IRS as other income on a 1099 form. Make sure you put it in writing and send 1 regular 1 certified and keep a copy. Give him 5 days to respond.

Answer 7

Sue him in civil court for the 35,000. Since you didn't get anything in writing about the 60,000 you won't be able to collect that amount. He will insist in court that it was a gift that you didn't expect repayment on - so if you have any witnesses to the transaction, you are going to want them there.

Answer 8

If you have no proof, you have set yourself to get taken for $35000 with little hope of repayment. Why did you not get anything in writing? Did you write anything in the memo line of the check written to them? I suppose it was for a "fantastic investment opportunity" for them that they couldn't pass up. The amount involved is way over what a small claims court can handle. You may wish to see an attorney.

Answer 9

IN SOME STATES, verbal agreements are binding. I do not know if that is the case in Michigan. I suggest getting an attorney on this one. You may not have any legal recourse at all, since you didn't get anything in writing or a signature.

Answer 10

You are screwed! I'd suggest getting in the car and driving to scumbags house and confronting him, be prepared with legal documentation for him to sign saying he borrowed 35 "THOUSAND" dollars and his intention of paying it back, once you have it in writing you can take him to court when he does not pay (which he won't) but if you take him to court today it is his word against yours and sadly most liars are more convincing than the person telling the truth.

Do it the sneaky way, get them to sign something saying they owe you first, then when they continue to "not pay" you can take them to court and most likely win.