Personal Finance

Lent money to someone - Help minimize the consequences

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  • May 17th, 2019 10:09 pm
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[OP]
Jr. Member
Jul 24, 2017
170 posts
52 upvotes

Lent money to someone - Help minimize the consequences

Hi all,

***First of all, I want to say I am not proud of what I will describe below and that I learned my lesson, I'll never do this kind of thing again. But I would like this thread to stay without judgment and focused on how I can minimize the consequences of my mistake***
***I acknowledge this is not a law forum either, but every opinion or experience can help.***

So, long story short, about 6 months ago, I lent money to someone in exchange for interests. We have a contract together with all the amounts stated, all the clauses and the contract was actually reviewed by an attorney prior to signing it.

Now, what happens is the person is not reimbursing. The person actually began to reimburse small amounts, but now the person is not anymore. Up to this point, she reimbursed 15% of what she should have. She comes up with every excuse possible to not pay and I now know she is lying to me. I've already threatened her to send a formal notice prior to a small claims lawsuit. The person then threatened me with bankruptcy, which would mean I would loose everything.

I have 2 options possible :
1. Send the formal notice hoping she was bluffing and that it will encourage her to reimburse. The other side of the coin: I take the risk of bankruptcy and/or lawsuit which equals time, money and stress.
2. Continue to wait and be accommodating hoping she'll start to reimburse again. The other side of the coin: this situation creates stress in my life.

For now, I tend towards option 2. And I am not asking for opinion on what I should here. For now, I can live with the situation and I am OK with option 2. This might eventually change though.

What I want to make sure is I don't get scammed on a technicality.
For an outside point of view, is there another option the person could consider that I am not seeing? For example, is there a maximum time the contract has a value that she could hope it goes there and I loose every legal leverage? What could someone with bad intentions do in this situation hoping to take advantage of the situation as much as possible?

Thanks!

EDIT: I have a collateral representing around 20% of her debt.
Last edited by max9505672 on Jan 16th, 2019 7:20 pm, edited 1 time in total.
103 replies
Deal Fanatic
User avatar
Mar 23, 2008
8975 posts
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Edmonton
You may want to investigate “debt statute of limitations” in your area... If they delay long enough, you may have issues even if you did take them to court.

C
Sr. Member
Jun 13, 2018
522 posts
360 upvotes
You may (or will) not like this. You have rolled over and now have no bargaining position with the bluffed lawsuit, she raised you back on bankruptcy, & you are folding.
Please sir, can I have some more.
doesn't mean you'll lose on a technicality, it means you're now an unsecured, insecure, debt holder.
Deal Addict
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Mar 16, 2010
2869 posts
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Burlington
Force her to declare bankruptcy or you get paid. Either one seems like a win win to me.
Deal Addict
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Feb 19, 2014
2011 posts
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Toronto
I learned this lesson a long time ago, and many on the internet has told me the same, if you lend money to a friend, do so on the basis that you won't ever get it back.

That said, I had about $1,000 outstanding to me from this guy I didn't really know. He was dodging me like crazy until I threatened to ask his mother for the money. He didn't live at her house, but I met her once and felt she could help me remediate. Not sure if that threat will help you, but as soon as I told him that, he paid me.

Next time, get collateral, these situations can get messy, good luck.
Deal Fanatic
Apr 16, 2007
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Financial District B…
max9505672 wrote:
Jan 16th, 2019 5:18 pm
Hi all,

about 6 months ago, I lent money to someone in exchange for interests. We have a contract together with all the amounts stated, all the clauses and the contract was actually reviewed by an attorney prior to signing it.

Now, what happens is the person is not reimbursing. The person actually began to reimburse small amounts, but now the person is not anymore. Up to this point, she reimbursed 15% of what she should have. She comes up with every excuse possible to not pay and I now know she is lying to me. I've already threatened her to send a formal notice prior to a small claims lawsuit. The person then threatened me with bankruptcy, which would mean I would loose everything.

Thanks!
The very first thing you should do is investigate her financial background.
Does she own a home with mortgage, how many credit cards?, own a car that is still on loan? own her own business?

People who declare bankruptcy do not get to pick and choose which accounts and debts they can include in the BK and which ones to leave out,
When an insolvent person declares BK everything goes!
*Let me also add that people do not get to declare BK just on a whim. Part of the declaration is for a bankrupt to show they have been 'under financial strain for some time' with no relief in sight. Someone just wanting to declare BK for the hell of it can and will get denied in the BK courts.

If she has a lot of credit cards that she depends on then she may have more to lose than you.
You should seek out some preliminary legal counsel and at least send out a letter of intent with a demand notice.
If she fails to respond then take he to small claims court and win a judgment against her. With a judgment you can then apply for income source garnishment and finally get the money owed to you.
Last edited by mikeymike1 on Jan 16th, 2019 7:29 pm, edited 2 times in total.
----------------------------Licensed Credit Bureau member, S1, FI Automotive, CCP forums most banned = x 13 and counting, guess who that is?... stomped to the curb once again
[OP]
Jr. Member
Jul 24, 2017
170 posts
52 upvotes
CNeufeld wrote:
Jan 16th, 2019 5:26 pm
You may want to investigate “debt statute of limitations” in your area... If they delay long enough, you may have issues even if you did take them to court.

C
Thanks for the advice!

I am in Quebec and the debt statute of limitations is 3 years starting at the moment of the last payment. So I still have time in this regards and if she ever makes another payment, the 3 years period starts over.
[OP]
Jr. Member
Jul 24, 2017
170 posts
52 upvotes
Dpack22 wrote:
Jan 16th, 2019 5:39 pm
Force her to declare bankruptcy or you get paid. Either one seems like a win win to me.
Bankruptcy seems more like a lose lose to me...
Last edited by titaniumtux on Jan 17th, 2019 6:07 am, edited 1 time in total.
Reason: Spelling
[OP]
Jr. Member
Jul 24, 2017
170 posts
52 upvotes
jellytime wrote:
Jan 16th, 2019 6:19 pm
Next time, get collateral, these situations can get messy, good luck.
Forgot to mention I have a registered collateral is she ever goes to bankruptcy. Represents about 20% of the debt which is better than nothing...
[OP]
Jr. Member
Jul 24, 2017
170 posts
52 upvotes
mikeymike1 wrote:
Jan 16th, 2019 6:49 pm
The very first thing you should do is investigate her financial background.
Does she own a home with mortgage, how many credit cards?, own a car that is still on loan? own her own business?

People who declare bankruptcy do not get to pick and choose which accounts and debts they can include in the BK and which ones to leave out,
When an insolvent person declares BK everything goes!

If she has a lot of credit cards that she depends on then she may have more to lose than you.
You should seek out some preliminary legal counsel and at least send out a letter of intent with a demand notice.
If she fails to respond then take he to small claims court and win a judgment against her. With a judgment you can then apply for income source garnishment and finally get the money owed to you.
To my knowledge she doesn’t own much. She told me and showed me proofs (that I took pictures of) that she has a life insurance which you loose if you ever go bankruptcy. The persone being around 55 y.o., I suspect the life insurance being more than her debts but I could be wrong.

If she ever goes to bankruptcy and I discover that the life insurance proof were false, I guess I could have a case for fraud and could file a lawsuit in that regarda. Not sure I want to go there though..

What do you mean by : « If she has a lot of credit cards that she depends on then she may have more to lose than you »?

Also, does anyone know the fees involved for small claims and other expenses related to executing a judgement?
Deal Fanatic
Apr 16, 2007
7073 posts
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Financial District B…
max9505672 wrote:
Jan 16th, 2019 7:18 pm
What do you mean by : « If she has a lot of credit cards that she depends on then she may have more to lose than you »?

Also, does anyone know the fees involved for small claims and other expenses related to executing a judgement?
If she uses credit cards for everyday spending or has gas cards for gas etc. they all have to be included in the bankruptcy filing. That alone may cause daily operational problems alongside the poor credit filing on her credit bureau which will prevent her for obtaining any other future credit.

Small claims court filing is about $75.00 in Ontario, not sure about Quebec.

I added another line to my original posting, read it too.
----------------------------Licensed Credit Bureau member, S1, FI Automotive, CCP forums most banned = x 13 and counting, guess who that is?... stomped to the curb once again
[OP]
Jr. Member
Jul 24, 2017
170 posts
52 upvotes
mikeymike1 wrote:
Jan 16th, 2019 7:26 pm
If she uses credit cards for everyday spending or has gas cards for gas etc. they all have to be included in the bankruptcy filing. That alone may cause daily operational problems alongside the poor credit filing on her credit bureau which will prevent her for obtaining any other future credit.

Small claims court filing is about $75.00 in Ontario, not sure about Quebec.

I added another line to my original posting, read it too.
Got it, thanks!

And once a judgement has been done, can a person still declare bankruptcy and the judgement is worth nothing?
Deal Guru
Jun 26, 2011
12044 posts
2285 upvotes
Markham
Personally I'd escalate now and call her bluff. Sitting back and hoping she will start paying again is a losing situation. I'm not a lawyer, trustee or expert in this field but I'd push back with whatever legal means you have now. Could you get a judgement against her? Wage garnishment? Force the sale of her collateral?

Doing nothing is a bad strategy imo
Deal Addict
Jan 2, 2015
1541 posts
792 upvotes
Not sure what you are looking for here in terms of technicality. Technicality’s will depend on the contract and how well was written.

Personally, I would force the bankruptcy. Once someone starts avoiding you and renaging on their end the deal its a show of character and a lack of integrity. People with integrity even in tough times will instead of avoiding and weaseling our, and in this case threatening bankrupty will not the do the right thing.

How I look at this based on the limited info is, you are not going to get the money out of thegoodness of her heart or her desire to do right. She has proven this by threatening bankruptcy instead trying to work out a solution. If you take option 2, you will get little or nothing, but no hassle. If you are okay with this, then there is no further discussion.

If you want any attemp to get your money, then forcing her act on her bankruptcy call will have a longer impact to her than you since you are no gettting anything. Yes, it is a headache, but it will force her to liquidate her stuff and you might get something depending on her other debts.
On a 'smart' device that isn't always so smart. So please forgive the autocorrects and typos. If it brothers you, then don't read my posts, but don't waste my time correcting me. If you can get past the typos, then my posts generally have some value.
[OP]
Jr. Member
Jul 24, 2017
170 posts
52 upvotes
RolandCouch wrote:
Jan 16th, 2019 7:43 pm
Personally I'd escalate now and call her bluff. Sitting back and hoping she will start paying again is a losing situation. I'm not a lawyer, trustee or expert in this field but I'd push back with whatever legal means you have now. Could you get a judgement against her? Wage garnishment? Force the sale of her collateral?

Doing nothing is a bad strategy imo
Thanks for the advice.

I'm not actually doing nothing. I'm constantly trailing her and occasionnally meeting with her so she shows me proofs of what she claims. I think, somewhere inside me, I'm still hoping this is just a bad phase and she'll start to pay. But at the sime time, while I'm writing this, I recognize how silly it sounds. Dishonest people will remain dishonest.

The ''doing nothing'' part will not last indefinitely. I will, sonner than later, quit pursuing her and will start legal procedures.

The goal of this thread was mainly to make sure I'm not getting blindsided by something I wasn't thinking about.

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