Personal Finance

Lent money to someone - Help minimize the consequences

  • Last Updated:
  • May 17th, 2019 10:09 pm
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Deal Addict
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Feb 19, 2014
2401 posts
1300 upvotes
Langley
alanbrenton wrote:
Feb 7th, 2019 8:29 pm
I learned a few lessons:
  1. Obtain a collateral worth more than 100% of the loan
  2. Do not trust all women, no matter how cute and affectionate they are. I would trust @angryaudifanatic as an exception as she's been so helpful on RFD.
  3. Do not lend money to anyone with ill-repute/character or spendthrift qualities because the chances of getting paid back is very low. They can always tap their credit cards, LOC's or even Money Mart.
  4. Roll with the punches on RFD. Most are just pulling one's leg.

All the best OP. This is coming from a guy who got into a bind, borrowed from families and friends and paid off the obligations. I think character and some decent income / simple lifestyle are the primary determining factors whether debtors intend to pay down their debt.
Man, one of my good buddies got fleeced by his now ex-girlfriend. She was definitely a looker and he pretty much said himself he got seduced by her. He helped her pay off her credit card bill which was over $7,000 <-- Like are you serious man??? And she ended up moving in with him and wasn't paying for rent or food or anything for about 18months. Now my buddy makes about $80k a year, which is quite good, but still. She ended up breaking his heart and moved onto another guy, who seemingly had more money.

Personally, I think that was the best thing to happen to him. But, he was crushed at the time.
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Apr 21, 2004
50550 posts
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jellytime wrote:
Feb 8th, 2019 2:15 pm
Man, one of my good buddies got fleeced by his now ex-girlfriend. She was definitely a looker and he pretty much said himself he got seduced by her. He helped her pay off her credit card bill which was over $7,000 <-- Like are you serious man??? And she ended up moving in with him and wasn't paying for rent or food or anything for about 18months. Now my buddy makes about $80k a year, which is quite good, but still. She ended up breaking his heart and moved onto another guy, who seemingly had more money.

Personally, I think that was the best thing to happen to him. But, he was crushed at the time.
Maybe onto someone in the $100k thread, and then onto another one in the $250k household thread. :(

That sucks. Lots of people can play good actors/actresses nowadays. Hopefully he had lots of mini Happy Endings.
Member
Jun 9, 2013
305 posts
206 upvotes
Surrey
max9505672 wrote:
Jan 25th, 2019 1:19 pm
Other quick question for my formal notice (mise en demeure).

I want to send the formal notice with a delay for the amount that hasn't been paid up to this date. For example, she owes 5000$ total, but the amount due up to now is 1000$.

Should I request 1000$ in, let's say, the next 10 days OR 5000$?

I am tempted to request 1000$ because I still have a small hope this formal notice will ''scare'' her and push her to start paying (which is what I'd prefer at the end of the day).

BUT, if I do so, and she doesn't pay, and I file for small claims, can I claim 1000$ or 5000$?

I think it's the whole 5000$. There's a part in my contract sayings (sorry for the poor translation) :

4. Default
In each and every one of the following cases:
(a) When the borrower fails to make a payment when due or fails to reimburse the lender for any other amount due or that may become due under this agreement;
(b) Where the borrower is declared bankrupt or insolvent, or becomes unable to pay his debts in accordance with the provisions of any law created for the benefit of his creditors, or where the borrower makes an assignment of his property for the benefit of his creditors in general or recognize his insolvency in any other way; or
(c) Where the Borrower fails, either by action or omission, to fulfill or comply with any of its obligations under this contract,
The lender and the borrower can contractually agree on new repayment terms.
If no agreement is possible between the two parties, the lender has the right, without notice or other demand, to demand the immediate repayment of any unpaid amounts due, or due to become due, by the borrower under the terms of this Agreement. contract, whether or not the borrower has been given time to repay these amounts.




this kind of demand letter doesnt really do anything, if she doesnt want to pay, she wont pay either way, if she cant pay, u cant get blood from a stone.




i feel like u should just call her bluff on bankruptcy.

you said its 4 digits loan. bankruptcy cost is at least $2000.. so what she saves a max of $7999 from you but get no lending products for the next 7 years?

call her bakruptcy bluff and force her into a settlement with u is the best route imo.

ie u loaned her $5000, bankruptcy cost $2000, settle with her for $3000, that way after weighting in the cons and costs about bankruptcy, she would be more likely to lean towards settling with u.
Sr. Member
User avatar
Jul 25, 2018
667 posts
1002 upvotes
Milton, ON
Tough situation.. I once lent a co-worker $500 for 10% interest and he came up with every excuse in the book. Ended up getting it all after chasing him for about a year so I can sympathize with you, albeit with much less money.

People who dodge debts rarely change and I think that this will cause you endless bouts of stress. You have to think about the value of time too, how many hours did you spend researching your legal options and what to do? I think an all-or-nothing approach is the best given the situation, i.e. go with option 1. Call her bluff and take the gamble on her declaring bankruptcy. If she's willing to go through that instead of paying you back, she was never going to pay you back in the first place. Someone else said it earlier but never lend money expecting it back.

Best of luck to you OP.
Deal Fanatic
Apr 16, 2007
7113 posts
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Financial District B…
wow, can't believe this thread is still going... the statute of limitations has expired by now
----------------------------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
Deal Addict
Aug 18, 2018
1725 posts
1279 upvotes
Bay Area
JoelK22976 wrote:
Feb 11th, 2019 4:16 pm
Tough situation.. I once lent a co-worker $500 for 10% interest and he came up with every excuse in the book. Ended up getting it all after chasing him for about a year so I can sympathize with you, albeit with much less money.

People who dodge debts rarely change and I think that this will cause you endless bouts of stress. You have to think about the value of time too, how many hours did you spend researching your legal options and what to do? I think an all-or-nothing approach is the best given the situation, i.e. go with option 1. Call her bluff and take the gamble on her declaring bankruptcy. If she's willing to go through that instead of paying you back, she was never going to pay you back in the first place. Someone else said it earlier but never lend money expecting it back.

Best of luck to you OP.
+1!!!

Deadbeats will always be deadbeats. Never lend money to one unless you don't care about recovering a penny of it.
Member
Nov 5, 2018
353 posts
369 upvotes
Scarborough
Once you lend money to a friend, you are no longer friends; You transform that relationship into creditor and debtor. Never makes sense!
Money, Common Stocks, Credit Cards, Coupons, Condos (MCCCC)
[OP]
Jr. Member
Jul 24, 2017
183 posts
53 upvotes
First, thanks for everyone's input! For sure, this was the last time I lent money to someone.

So, since last time I posted, I sent the formal notice (mise en demeure) on Feb. 6th giving her 21 days to pay, which brings us to yesterday. The person reached to me last minute, the day before due date, and wanted to meet me to discuss new arrangements for paying back. I refused to meet and told she could contact me by e-mail (actually how she initially contacted me). Then she proposed to start paying back in a month from now and blabla, lots of BS (not the first time she tries to win time, I know it's her strategy). So I refused. I said without any payment by the date in the formal notice, I would go on with the legal steps.

So, it's decided, I am going on with small claims legal steps now. But I am wondering what I can claim exactly? For sure, the entire amount due (capital + interests) in our contract will be. But can I claim the small claims registering fees also (+/- 200$)? Other fees such as what I paid to send the formal notice (small amount, but still)? And especially, can I claim more interests? I see claiming more interests as a leverage stategy; when the person will receive the official small claims notice and see more money is asked, she might be tempted to settle with me (most likely not, but if I can claim more, I would).

If it's possible, how should i calculate the interest? Since I don't know when the judgement will be issued, it's impossible to establish, for example, a reasonable yearly interest rate and go from there...

EDIT: @FrancisBacon and @angryaudifanatic , your help was especially valuable for me a couple weeks ago. If you are still interested by this case, your input would, again, be greatly appreciated.
Deal Addict
May 12, 2014
2054 posts
1528 upvotes
Montreal
Yes, when delinquent debtors reach out (if at all) it's always at the last minute and it's always asking for just a little more time.

For small claims filing fee, and sending notice fee, this is known as "costs" and is standard to ask for. I think the clerk at the SCC will guide you on how (I don't know if in the latest form it's just a checkbox or if you actually need to formulate a sentence).

Interest and other items: does your contract contain any particular clauses in case of default?

For the calculation of interest (starting point and rate) the judgement will tell you how to calculate it in it's last lines (ie order X to pay Y starting on DATE at interest rate Z.). Then you use the Quebec lawyer's judgement and interest rate calculator available free online to everyone to calculate.

But that's like one or two years away.
[OP]
Jr. Member
Jul 24, 2017
183 posts
53 upvotes
FrancisBacon wrote:
Mar 1st, 2019 5:57 am
Yes, when delinquent debtors reach out (if at all) it's always at the last minute and it's always asking for just a little more time.
Yes, and it's crazy in my case how the person tries to blame me for not accepting more time. She says I'm not in good faith and I really do not want to settle, blablabla... I have 0 zero advantages going to small claims, just more trouble for me... Anyways, this is a small and very crooked person that would do anything for her personal gain.
FrancisBacon wrote:
Mar 1st, 2019 5:57 am
For small claims filing fee, and sending notice fee, this is known as "costs" and is standard to ask for. I think the clerk at the SCC will guide you on how (I don't know if in the latest form it's just a checkbox or if you actually need to formulate a sentence).
I know there's is an online service for ''Ministère de la Justice du Québec'' where you can setup an account and I thought that was how I was supposed to file for small claims. Basically, you are suggesting meeting with a clerk directly at the court? This person could help filing everything I suppose?
FrancisBacon wrote:
Mar 1st, 2019 5:57 am
Interest and other items: does your contract contain any particular clauses in case of default?
No particular clauses other than the guarantee (car) and that in case of default I have the right, without notice or other demand, to demand the immediate repayment of any unpaid amounts due, or due to become due, by the borrower under the terms of this agreement whether or not the borrower has been given time to repay these amounts.
FrancisBacon wrote:
Mar 1st, 2019 5:57 am
For the calculation of interest (starting point and rate) the judgement will tell you how to calculate it in it's last lines (ie order X to pay Y starting on DATE at interest rate Z.). Then you use the Quebec lawyer's judgement and interest rate calculator available free online to everyone to calculate.
Oh ok, so the interest start at the date of the judgement, not at the date the person defaulted. Makes sense.

So I guess I'll file for the residual amount from our contract, small claims fees and minor fees such as RDPRM inscription fees and postal fees.
Deal Addict
Nov 10, 2018
2442 posts
2403 upvotes
max9505672 wrote:
Feb 28th, 2019 8:49 pm
First, thanks for everyone's input! For sure, this was the last time I lent money to someone.

So, since last time I posted, I sent the formal notice (mise en demeure) on Feb. 6th giving her 21 days to pay, which brings us to yesterday. The person reached to me last minute, the day before due date, and wanted to meet me to discuss new arrangements for paying back. I refused to meet and told she could contact me by e-mail (actually how she initially contacted me). Then she proposed to start paying back in a month from now and blabla, lots of BS (not the first time she tries to win time, I know it's her strategy). So I refused. I said without any payment by the date in the formal notice, I would go on with the legal steps.

So, it's decided, I am going on with small claims legal steps now. But I am wondering what I can claim exactly? For sure, the entire amount due (capital + interests) in our contract will be. But can I claim the small claims registering fees also (+/- 200$)? Other fees such as what I paid to send the formal notice (small amount, but still)? And especially, can I claim more interests? I see claiming more interests as a leverage stategy; when the person will receive the official small claims notice and see more money is asked, she might be tempted to settle with me (most likely not, but if I can claim more, I would).

If it's possible, how should i calculate the interest? Since I don't know when the judgement will be issued, it's impossible to establish, for example, a reasonable yearly interest rate and go from there...

EDIT: @FrancisBacon and @angryaudifanatic , your help was especially valuable for me a couple weeks ago. If you are still interested by this case, your input would, again, be greatly appreciated.
FrancisBacon answered most of your questions. Couple of things to keep in mind.

1) You cannot get what you don't claim, so claim away with what you feel is reasonable to claim.
2) In your statement of claim, ask for pre and post judgement interest pursuant to the relevant act in Quebec. (I don't know Quebec law enough). Here in Ontario, my statement would be:

The Plaintiff is seeking:

1) An order for pre-judgement and post-judgement interest pursuant to sections 128 and 129 of the Courts of Justice Act;
2) An order that the Defendant pay costs to the Plaintiff on a substantial indemnity basis; (I don't believe this is relevant in Quebec)
etc. etc.
For legal topics and discussions, the opinion, guidance, and thoughts provided are my own and are not considered to be legal advice, in any manner.
Deal Addict
May 12, 2014
2054 posts
1528 upvotes
Montreal
max9505672 wrote:
Mar 1st, 2019 9:41 am
... online service ... file for small claims. Basically, you are suggesting meeting with a clerk directly at the court? ...
Oh ok, so the interest start at the date of the judgement, not at the date the person defaulted. .
...
Don't know if you can file online for small claims. You can for other tribunals. But don't do it unless you really know what you're doing. If at all possible go to the Palais de Justice, Old Montreal, basement, small claims and ask for help filling out the paperwork.

The interest start date is variable according to different rules (day of default, judgement Day, etc.). You just make sure to bring all your originals (loan doc, mise en demeure, reg.mail receipts, and proof of delivery...). The Judgement will give the starting date. Then plug into the Barreau's online calculator.

Ps: registered mail: be sure to print BOTH the tracking log (accepted at post office, out for delivery, etc) AND the signature sheet / delivery proof. And print it now before it becomes unavailable.
[OP]
Jr. Member
Jul 24, 2017
183 posts
53 upvotes
FrancisBacon wrote:
Mar 2nd, 2019 1:21 pm
Don't know if you can file online for small claims. You can for other tribunals. But don't do it unless you really know what you're doing. If at all possible go to the Palais de Justice, Old Montreal, basement, small claims and ask for help filling out the paperwork.

The interest start date is variable according to different rules (day of default, judgement Day, etc.). You just make sure to bring all your originals (loan doc, mise en demeure, reg.mail receipts, and proof of delivery...). The Judgement will give the starting date. Then plug into the Barreau's online calculator.

Ps: registered mail: be sure to print BOTH the tracking log (accepted at post office, out for delivery, etc) AND the signature sheet / delivery proof. And print it now before it becomes unavailable.
I began filling everything out online. It seems pretty straightforward and you can meet by phone with a clerk to make sure everything is properly filed. However, I might reconsider and do as you proposed.

Thanks for the tips
[OP]
Jr. Member
Jul 24, 2017
183 posts
53 upvotes
So about a month ago, I sent the small claims request and been waiting since then.

Yesterday I received this by email :

The debtor named in title filed an assignment of her property on May 15, 2019.

Under section 69 of the Bankruptcy and Insolvency Act, creditors have no recourse against the insolvent person or his property and can not bring or continue any action, enforcement or other proceeding for the purpose of recovery of provable claims in bankruptcy.

So I guess this is pretty much over. I have doubts this was planned since the beginning which is most likely illegal, but I don't have the will to presecute this person since this will be long and expensive and I'll have the burden of proof.

My question now is how it works from here? Will the trustee in bankruptcy summon me since I am a creditor? How are this person's property distributed between her creditors? How should I act to gain the car?

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