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I don't know why she gave him $20,000
November 14, 2012 7:27 AM   Subscribe

How do you get back a lot of money from someone you loaned money to if they claim they're broke?

A new acquaintance of mine, who recently came to Canada from Korea (she is in her early twenties and living with her parents) loaned money to a man over a period of three years; $20,000 -- money SHE was loaned for OSAP. She seems to be a very naive (or trusting) person, in that she kept giving him money; $1000 here, $2000 there. When she asked for it back, he told her (what sounds to me like a lie) that he was broke and needed more money from her to get back the money she loaned him, by hiring lawyers and suing this other guy who owed HIM money.

At this point, she doesn't know what to do -- how to get him to give her the money. (She met this guy over the internet; he apparently taught her therapeutic massage and then they dated briefly. He is from her culture, which doesn't matter to me, but she keeps making a point of it.)

I feel bad for her and want to help her, but I don't know what legal recourse she has. She says she has him on tape admitting that the money is owed. What's the next step? She refuses to tell her parents (she says, "they'll kill me") and now she is looking to me for advice. She wants to get a lawyer to sue him, but I was told by a friend that this probably wouldn't work as it wasn't outright fraud, just a loan.

Any lawyers here know what can be done? It's a really unfortunate situation, and I suspect this guy is not keen to give her any money. (He's in his late thirties.)

(PS. I know her because I am tutoring her in English voluntarily, once a week; she works in the service industry which is where I met her. I was trying to help her get into an English-language program and she recently revealed all this to me and now regularly sends me panicky emails. She seems very, very young for her age.)
posted by Clotilde to Law & Government (16 answers total)
 
I'm not a lawyer, not legal advice, etc, but I don't see why it not being fraud would matter. Credit card companies sue people for unpaid debts all the time. Her talking to a lawyer is, I would think, an excellent idea.
posted by gracedissolved at 7:33 AM on November 14, 2012


IANAL, but does she have any records of loaning him money? I feel like she will be hard pressed to get any lawyer to take the case if there is no written proof. Even if she doesn't it can't hurt to find a lawyer to talk to. They are the only people who can give good legal advice.
posted by sgo at 7:33 AM on November 14, 2012 [1 favorite]


I think something smells strange here. A recent immigrant living with her parents recieved $20,000 in OSAP loans?

Are you sure you are not being told a story to try and get you to loan her money?
posted by srboisvert at 7:37 AM on November 14, 2012 [2 favorites]


The "friend" I mentioned is a laywer; he is the one who said that it wouldn't really work as a lawsuit. She could consult another lawyer, of course (rather than me consulting one informally on her behalf).
posted by Clotilde at 7:37 AM on November 14, 2012


srboisvert: I don't think this is what is happening. In any case, I wouldn't lend money to her. I don't know if the entire $20,000 was student loans.
posted by Clotilde at 7:38 AM on November 14, 2012


How did she loan him the money? I assume she didn't go to the bank and ask them to drop $20K in fresh hundreds into a duffel bag and hand it to him. There has to be some kind of paper trail, even if it is a receipt for a money order.

And with lawyers, like with doctors, if you're not on board with what one tells you, it is always a smart move to get a second opinion. If the second one has a better idea, then it might pan out. If they agree with one another, you can be sure that what they're telling you is correct.
posted by griphus at 7:50 AM on November 14, 2012


griphus: I asked her the same thing; apparently it was cash. I think she probably never gave him more than a few thousand at the time. I was hoping she had done internet payments or something.
posted by Clotilde at 7:51 AM on November 14, 2012


She can try to sue him, I suppose, but as it's in cash, and there was no written agreement, it seems she might be out that money.

I always follow the rule: NEVER lend money to anyone that you wouldn't give to them outright, because in many cases, that's what you end up doing anyway.
posted by xingcat at 7:52 AM on November 14, 2012


Oh, sorry, I misread that part. I'm no lawyer, but I think evidence of consistent and large cash withdrawals like that could be worth something. Her bank statement should have a record of them.
posted by griphus at 7:53 AM on November 14, 2012


If she doesn't have any document that specifies his agreement to repay the money she gave him, I suspect this was a very expensive lesson learned.

Before you put any more energy into this, ask to see the documents.
posted by HuronBob at 8:18 AM on November 14, 2012 [1 favorite]


This sounds to me like she is trying to scam you.
posted by bq at 8:20 AM on November 14, 2012 [2 favorites]


If they met over the internet does she have his email address? If I were her I would then write him a carefully worded email asking him to elaborate on his plan to "sue someone else" to get her money back. Ask him how much money her needs now and clarify "so this means you would owe me $25,00 in total? And you would pay me the full amount on December 1st?" Have a lawyer help her craft the email to sound plausibly naive and in her own words (typos, her idioms) but still legally damaging.
posted by saucysault at 8:21 AM on November 14, 2012 [6 favorites]


An oral agreement is just as binding as a written one (well, there is some weirdness but that's a good rule of thumb). The only difference is the difficulty to prove it. But if he's admitted that he owes the money, especially if it includes the amount owed, that's a very good first step. But it really depends on what that tape says.

Essentially she can sue him for breach of contract (maybe; depends on if/when he was supposed to pay her back) or unjust enrichment - he has money that he shouldn't have.

You say OSAP, so presumably she's in Ontario. Small Claims court goes up to $25,000. It costs very little to file in it, and the procedure is pretty understandable and efficient. It might be worth looking into that.

But I can't emphasize enough: it REALLY DEPENDS on what the tape says.

[I am absolutely not your lawyer, I am not permitted to give legal advice without supervision from a lawyer which I do not have, I am not giving legal advice over the internet in any case.]

On preview, saucysault's suggestion is good. Get at least something in writing if possible.
posted by Lemurrhea at 8:23 AM on November 14, 2012 [3 favorites]


I am a creditor's rights lawyer. IAAL, IANYL. My comments are based on Anglo-American common law, which I imagine are quite similar to Canadian in these matters.

Your lawyer friend is wrong. Your acquaintance does not need to show fraud to recover money lent. However, I do not put much stock in the recorded conversation. Many state jurisdictions in America require all parties to a conversation to know that it is being recorded, and yours might also be such a jurisdiction. A much better way to get the debtor to confirm the existence of the debt is for your friend to have an email exchange with him about it. That way, you have it in writing and there should be no admissibility bar. Getting him to cop to the debt is important because I am sure that there was never any written loan agreements and you want to prevent the debtor from saying that the loans were merely gifts. Getting him to admit to the debt is key - I cannot stress this enough. Her lawyer, whom I advise she retain, can help with drafting it.

If the debtor never had any intention of paying the money back at the outset, there could conceivably be a fraud in the inducement claim, but this exception to the fraud in performance rule is rather hard to prove. It's worth asking in her email something like, "did you ever intend on paying me back?" but he'll probably just lie. I think your friend's case is for money lent.

I recommend that your friend get a lawyer and sue the guy. I would expect this to be a quickly resolved case because I do not expect much in the way of defense. However, your acquaintance should be aware that receiving a judgment from the court awarding $20,000 is not a check that can be deposited in the bank. She would still need to enforce the judgment, and it is very hard to collect money from a debtor with no money. I still recommend suit, though. I do not know how long a judgment lien lasts in Canada, but I imagine it is for a long time, and she might get paid one day.

I would also recommend that she advise her parents. Yes, they will shoot into orbit, but this is serious business and your acquaintance is liable to repay the OSAP money back. They will probably have questions at some point and more immediately, they are in a good position to help your acquaintance.
posted by Tanizaki at 8:23 AM on November 14, 2012 [10 favorites]


For the record, again presuming she's in Ontario, it's one-party consent to recording. I should have mentioned that, although even with that getting an emailed admission is best.
Other than that Tanizaki is right on the money.
posted by Lemurrhea at 9:37 AM on November 14, 2012


First, point out to her that being from the same culture is being used by him to gain her trust to scam her, like Bernie Madoff and the jews.
>>needed more money from her to get back the money
This opens the possibility that giving him a small additional amount (ie he asks for a $1,000 and she "accidentally" makes the transfer for a hundred) would allow for an unambiguous paper trail, and possibly reveal his bank account number.
If he is doing this to her, it's likely he is doing it to other women too.
She needs to investigate and document everything she can find out about him, and assume everything he has told her is a lie and needs to be confirmed. If she does get a judgement, at least she can immediately go after his assets.
posted by anon4now at 10:19 AM on November 14, 2012


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