How do I get someone to give me money?

February 6, 2008 12:11 PM

How do I get someone to give me money?

Someone owes me $800. After much wrangling and talking, we finally agreed that the person would pay me back $20 a month, without interest.

Problem: I might move, and so may not be in the person's state next year. What's the best way to create an agreement and to document it, so that if she stops paying me for some reason, I have clear, documented evidence (that will hold up in court) of how much she did pay me, and how much she still owes me?

Will bank checks suffice as evidence? Is there any way to get a third party? I do plan to create a written contract/agreement, but are there any things I should watch out for?

posted by suedehead to work & money (8 comments total)

I'm not sure how $800 stacks up against the usual fees for drafting this sort of thing, but you'll probably want to talk to any friends of yours that happen to be attorneys.
posted by Inspector.Gadget at 12:20 PM on February 6

Go to a notary public.
posted by zennie at 12:27 PM on February 6

Write up a contract and get it signed by both participants (and notarized at the lendee's expense if you'd like). If you have the kind of lawyer that will do free consultations pursue that too for the wording, athough my guess is it will be fairly basic (eg. "I ____ agree to pay x payments of $x for the sum of $xx" x______"). Make sure each payment is paid by check (or is reportable via a reputable 3rd party).

If it doesn't pan out, send a letter of intention or two...then take it to court.
posted by samsara at 12:30 PM on February 6

You should add an acceleration clause, so that the whole debt becomes due immediately if she starts missing payments or declares bankruptcy. Otherwise you might find yourself in the unenviable position of suing $20 at a time.

You may also want to add penalties if she defaults, such as interest or reasonable attorney's fees for recovery.

Send her a statement every month to create a good record of how much has been paid and is still owed.
posted by grouse at 12:34 PM on February 6

Your bank may notarize documents for free. Mine does.
posted by zippy at 12:46 PM on February 6

In addition to grouse's acceleration clause, have the lendee put up something as collateral. As an extra incentive to pay, you know.
posted by trinity8-director at 1:09 PM on February 6

When I borrowed money from my brother, what I did was write him a stack of pre-made out checks that he could deposit once a month. The stack of checks reflected the entire amount I owed. The last check was the interest for the loan. Maybe you could ask her to do the same, although you might want to bump it up to $20 a week so you aren't dragging it out for the rest of your life.
posted by 45moore45 at 1:43 PM on February 6 [1 favorite]

Going to court could still be a pain if you will be far apart. Many a EULA I've accepted has had a clause determining venue. Can you insert one of those to make it easier on yourself?
posted by eritain at 2:53 PM on February 6