Never loan money to friends / family / boyfriends.
January 18, 2013 8:02 AM   Subscribe

This was me We broke up and he's stopped paying. Do I have any recourse?

I loaned my (now ex) boyfriend money. He's stopped making payments and whenever I try to ask him to set up a payment plan, he comes up with an excuse as to why he has no money. Do I have any recourse? I'm financially perfectly fine without the money, but I know he makes enough to at least make payments and has been bragging on Facebook about new purchases he's made. He has a full time job in addition to his side business and lives with his parents rent-free. He owes around $10k and I am just asking him to pay $250 a month. Is it worth it to try to get a lawyer or do I just need to forget about the money and move on?
posted by sunshine37 to Work & Money (22 answers total) 7 users marked this as a favorite
I maintain my previous position from the earlier thread that you are an owner of his business.

Of course you have recourse, if this loan is documented in some way. Emails should be plenty.

There's no real reason to let someone steal from you—unless it's easier on you to blow it off, and you don't want to invest the time and money in collecting.
posted by RJ Reynolds at 8:08 AM on January 18, 2013 [17 favorites]

For 10k and your own self-respect go see a lawyer. For something like this a boiler-plate letter and service won't cost much and may be recovered from the ex. Glad to hear you are done with him!
posted by saucysault at 8:09 AM on January 18, 2013 [15 favorites]

Jesus yes get a lawyer. Do you have any email from him in which he admits to the debt?
posted by DarlingBri at 8:09 AM on January 18, 2013 [3 favorites]

Depending on where you live, you might be able to recoup that amount in small claims court.

If you need to lawyer up the cost/benefit ratio might be unrealistic.
posted by rocketpup at 8:09 AM on January 18, 2013 [3 favorites]

I was totally about to say just chalk it up to an expensive lesson learned. But $10k?! You should definitely pursue that.

Did you follow the advice on the previous thread to get something in writing from him about how much he owes? Not that oral contracts aren't equally binding (in many situations), but they do make it harder to show evidence when he shows up in court and claims that he thought that all the money was a gift.

Find a lawyer who will give you a free/cheap consultation (30-60 mins) and give you an idea of whether or not you have a good case. Going through a whole case with a lawyer will probably eat up a good chunk of that $10k, but if you can collect, I'm willing to bet you will have a good chunk left that you can use to buy yourself an awesome vacation.

Good for you for not being with that person anymore.
posted by sparklemotion at 8:15 AM on January 18, 2013 [4 favorites]

Lawyer lawyer lawyer lawyer lawyer lawyer lawyer.

Lawyer. Get one. This dude has been fucking you over since day one. It doesn't matter if you have 1 billion dollars in the bank right now. This asshole needs to learn that his shitty actions have real life consequences or he will continue doing this to other unsuspecting young women who wrongly believe that he cares about them.
posted by elizardbits at 8:16 AM on January 18, 2013 [25 favorites]

One of the exceedingly small number of things my state government got right is allowing plaintiffs on small-value matters (<$7500, I think) to recover their legal fees from the defendant if they win. So in Oregon, if you have certain types of matters (I think loans are one) and the defendant has some money, you can get a lawyer to help you collect.

But even in states where the best you can do is hire a lawyer on contingency, $10k is enough to get at least a new lawyer's help (but again, assuming that there is money to collect in the first place).

So: if the guy has money or a job and owes you $10k, it's worth visiting a lawyer.

posted by spacewrench at 8:18 AM on January 18, 2013 [2 favorites]

Yes, if the amount is $10,000 small claims court is the way to go.

If you don't want to pay hundreds of dollars for a lawyer you absolutely can represent yourself and your only costs will be a small filing fee (often under $100) and lots of your own time. Most small claims court cases don't involve any lawyers.

I agree with sparklemotion that an hour or two of advice from a good lawyer before representing yourself would not cost much and might help.

If his only argument is that he has no money, the judge will ask helpful questions about his income and discover that he does have money.
posted by steinwald at 8:21 AM on January 18, 2013

Uh, didn't you make the loan by opening $20k worth of credit cards in your own name and letting him use them?

It's going to be pretty hard to collect on that debt. I'd say move on...
posted by 99percentfake at 8:22 AM on January 18, 2013

IAAL, IANYL, TINLA. Please allow me to shed some light on the "lawyer" chorus.

The biggest problem I see is that you say "loan". What are you going to do when boyfriend says "gift"? Neither of your questions on this issue mention any loan agreement, so I assume that there is none. The only loan agreement that exist here are your agreements with the credit card companies, upon which you are the sole obligor.

I am sure someone will mention oral contract. They exist, but I do not think it is likely that you have one here. Before you gave him the money, did you tell him, "I am lending you this money on the condition that you repay it to me according to X terms. Do you agree?" and then he said, "yes?" If that didn't happen, you don't have an oral contract. Any discussions of repayment after you gave him the money do not matter. A strong indicator that this was not a loan to him was that based on your commingling of funds, you don't know who owes what to whom.

A civil lawsuit is not about telling the judge what a jerk the other guy is and then you get money. It's not even about telling the court about how the other guy wronged you and He Must Be Stopped before he wrongs another woman. If you are going to file suit, you need to prove a legal wrong that has a legal remedy. I think you have an uphill battle in that regard. People are saying "small claims", but $10k is going to be outside of small claims subject matter jurisdiction in most states I have heard of.

Of course, consult with a lawyer in your area if you really want to know your legal options, but I do not think your road to the courthouse is paved with gold. (it almost never is)
posted by Tanizaki at 8:26 AM on January 18, 2013 [11 favorites]

If you go to small claims court, make sure in your area they do judgments up to the amount he owes you. If you go to a lawyer, make sure you aren't going to be taken advantage of twice before you enter into any type of arrangement with the lawyer. If you want to pursue it on your own, be persistent so he knows you are not going to walk away. People like him will take advantage of other people as long as they can get away with it, but if you stand up to them, often they crumble eventually. And don't feel you need to be "nice" about $250/month only. Ask for more. Be shrewd, be harsh, be demanding. This is about money now.
posted by Dansaman at 8:29 AM on January 18, 2013 [3 favorites]

I would not take this to small claims court. If you go to small claims court, even if you win, you need to actually collect the judgment. It's not like the judge issues the order and your ex pays you cash on the spot. Enforcing a judgment is a pain in the ass and you will probably need a lawyer to make it happen. What you will wind up doing is spending a lot of time and energy on this, and probably will not be likely to collect much. This analysis would change if for any reason you think if he gets a judgment against him that he will just pay it. I can't imagine given your history with him why this would be the case.

This is strictly cost-benefit. You are not likely to recover the full amount, so you have to decide how much this is worth your time and energy. If I were in your shoes, I'd take it to a lawyer who will take the case on contingency, meaning they'll get some percentage of whatever is recovered, plus expenses. It is not a case with the promise of much money in it for the lawyer, so you can expect whoever takes it will do so with the expectation that they will not be spending much time on it.

They will file the lawsuit and your goal should be to settle with your boyfriend for some amount of money, like half. He pays $5000, your lawyer gets about $2000 of that, which will include the expenses and your lawyer's contingency recovery, and this chapter of your life is closed and now you are $3000 richer than you are today. If your boyfriend balks and refuses to settle, you may just have to let it go, since I can't imagine there are lawyers who really want to go through too far with this if the potential rewards are so small (but one thing that might change this is if there is any kind of ability for the lawyer to collect fees from your boyfriend--some states have fee shifting provisions for cases for relatively small dollar amounts that work like this: you offer to settle it for a certain amount, and if the other side refuses they have to pay your attorney fees if you win a larger amount than offered at trial. But this is a jurisdiction specific rule, and this is getting pretty far afield from the main topic).

Anyway, bottom line: this is likely to be frustrating for you and you say you don't need the money. If you love frustration, pursue this. If you don't love frustration, see about hiring a lawyer and aiming for a quick settlement to at least get something out of it for the least amount of time and energy invested.
posted by MoonOrb at 8:58 AM on January 18, 2013 [1 favorite]

Oh, I should have mentioned this. If his business is successful, I think you have an argument that you are a part owner of his business. So, there is the possibility that this could be more lucrative than just a few thousand bucks, and this might be something you want to explore with a lawyer. This isn't legal advice, but it's something you might want to raise with a lawyer when you're talking about your options.
posted by MoonOrb at 9:00 AM on January 18, 2013 [6 favorites]

IANAL, but if he was making payments on a regular schedule isn't that an indication that he thinks there is a debt?

Your other option here is to try to shame him into paying. Involve his parents with whom he lives.
posted by JohnnyGunn at 9:05 AM on January 18, 2013 [4 favorites]

Realistically, you didn't have him sign a promissory note or agree to pay back the loan, so it could be construed as a gift. Now, he may not know that, but if he is not paying you any money, going the legal route to try to force him to might not work in your favor! So you have to be prepared for that.

So, let's look at what happened here, in your own words: We combined our money into a joint account (in my name only, because of his credit) a few months ago so any money he owed me is now moot.

Yeah, that made me wince on your behalf. A true joint account has both names on it; what you did was take responsibility for the business under your own name. Both of you were paying into it, which looks good if you go to court, but he could easily say he was helping you out and has now stopped because the relationship is over.

Then there's this: We also sold an old car of mine, which he was driving for awhile and had paid about 20% of, to get a vehicle primarily to be used for his business, but that we will also use on vacations.

Who has that car right now? When you say 20% was paid, do you mean he paid that or you did? Because, worst case scenario, he might also be able to say he left you the car and considers that he has made good on the debt that way. Please tell me he didn't take the car, too!

Incidentally, how did you split up the business when you split up the relationship? You keep saying "his side business," but if he isn't paying you the money, there's also a good argument that it is YOUR business. What is the business, and do you have the ability to shut it all down? Maybe you could work that angle. It's either your business, in which case you should be running it, or it is a joint venture, in which case he is responsible for half the expenses. For it to be his business, seems to me like he would need to buy you out.

A lawyer, who knows the full story, is the only one who can advise you on the best course to take. So, if you decide to pursue this, lawyer up! But, and I'm sorry to say may not have a case to support this being a joint venture the two of you embarked on. So if he says it was all on you, or that you made a gift to him, no matter what the truth is or even what the judge thinks probably happened, you taking responsibility for all those loans individually bears a lot of weight.
posted by misha at 9:13 AM on January 18, 2013

If I were you I would just schedule consultations with several lawyers. Everyone here has a variety of opinions on what's possible, but there's no way for a bunch of us to really know.

I do think that if you can get the money back without more hassle than it's worth to you, you should attempt to do so because why should some con artist just keep bopping through life stealing stuff? But if you find that it would be time-consuming, expensive, or otherwise effortful to recover the money, or a lawyer goes "ah it's complicated but for $20000 I can fix this for you," then obviously, don't bother.

The reason why I think this is important for you to investigate and pursue properly, is so that you can at least establish the principle in your mind that business is business. Hopefully, you will never again be sweet-talked into entering into wacky interpersonal business loan arrangements with your romantic partner that basically set someone else to benefit and enable them to fuck you over on a whim. But by consulting a lawyer, even if you decide not to take it further, you'll still have stepped into a businesslike mindset and a mindset where you don't innocently cooperate with anyone who would like to rip you off, however nicely they ask you.
posted by tel3path at 9:29 AM on January 18, 2013 [1 favorite]

Yes, it is absolutely worth it to get a lawyer. Especially because the extent of the lawyer's involvement might be as simple as a sternly worded letter sent registered mail to his parent's house. It might be more complicated than that but it might not be. You won't know until you talk to a lawyer.

FWIW, your shame and embarrassment about this situation are clouding your judgment. It doesn't matter that you don't need the money (although I'm at a loss as to how someone who isn't independently wealthy doesn't need $10,000, but I digress...) It would help you greatly to stop looking at this as "asking" him for things. You're not "just asking" him for anything. He owes you money. He is responsible for having borrowed money from you and he is responsible for paying you back. You financed his business. You incurred debt on his behalf then paid twice on that debt by splitting the total debt with him AND paying god knows how much in interest on that debt over time. Sure, this wasn't the best thing to do to yourself but people have done worse for love and will again. None of that matters now. And because it needs to be said, this isn't about your romantic relationship. This has nothing to do with that. This is business. He borrowed money from you to capitalize a business. He's reneging on his debt though he presumably has income from the business, income from a regular job, and has minimal overhead because he's still on the tit at his parents' house.

Spend a little of the money you still have on your own peace of mind. Cease contact with him now, stop looking at his Facebook page (it's only going to stoke your anger), unfriend him on all social media, stop talking to him altogether, and turn all of this over to a lawyer.

There is a word for people who blithely take advantage of others financially and who don't care that it's wrong. That word starts with "C" and ends in "rook".
posted by TryTheTilapia at 9:35 AM on January 18, 2013 [2 favorites]

Remember, he can and may hire a lawyer as well.

Be mindful of your decision's unintended consequences and reciprocal actions. Consult a lawyer about the strength and merits of your case.
posted by Kruger5 at 10:27 AM on January 18, 2013 [1 favorite]

I would consult with a lawyer who specializes in partnerships in small businesses. I think this is the best way to approach this. I like the idea that you own his business, let's see if we can enforce that.

Gather up all of your paperwork regarding money you've loaned him. Any credit card bills, receipts, texts, emails, etc. Get that organized chronologically. Also, if he was making payments, get copies of your deposits (especially if they were checks,) and know exactly how much he has paid.

If you decide not to pursue this, and instead write the amount off as a loss on your income tax, the IRS may choose to tax your Ex on his 'windfall'. Which could be painful to him, as the only thing worse than an Ex trying to collect money from you, is the IRS. They don't play.

A lawyer is cheap to get this sorted out correctly.
posted by Ruthless Bunny at 10:59 AM on January 18, 2013

I was rear-ended by an uninsured driver a few years ago and she said she'd pay me out of pocket for the repairs, which was something like $2,800. She made irregular payments of $2-300 in cash whenever she could afford it. Then she stopped replying to my emails and voicemails, and I'm pretty sure she told the receptionist at her office to lie to me and say she was out whenever I called.

I got lots of bad advice (my mom told me to stake out her office!) and after a few months of emailing and calling a few times a week and losing lots of sleep about it, I just decided to say "fuck it" and let it go. Granted, $10K is a much larger sum than the ~$1K she still owed me, but my decision in this situation was the right one. I was thinking about this lady and the money she owed me every day for more than a year. Enough is enough. It was freeing.
posted by wolfnote at 11:24 AM on January 18, 2013 [1 favorite]

Yes, too small for small claims court, large enough for a lawyer. You need to forget about the guy and move on, but not the money.
posted by fifilaru at 1:23 PM on January 18, 2013

Yeah, it's probably worth it to talk to a lawyer. I wonder, though, how much bad blood is between you two now? Like, first recourse, is talking with him honestly about a) his promise to make payments, b) his lack of making the payments and c) his bragging on facebook. Like: "You said you'd pay me back and I don't want to hound you for the money, however you still owe $X balance and I'd like to just be done with it. I have friends who are suggesting I take you to small claims court which sounds like a royal pain in the ass. How can we resolve this?"

If you are on speaking terms, I'd start with him. And follow up your conversation with an email outline of what you spoke about and agreed to.

On the facebook thing -- does he know you're still "friends" on Facebook? You might say, "You know, you telling everyone on facebook that you just bought a new motorcycle makes me think that you're not serious about paying me back and I'm feeling frustrated that I placed my trust in you."

On the other hand, if you're facebook-stalking him, I suggest that you stop that for your own peace of mind. He may be buying all those toys on credit or getting a comp deal or whatever. It's not really your place as an ex to keep tabs on him this way.

So, how to resolve this? Your lawyer may suggest you think about a write-off amount. What if he paid you a write-off amount of $.80 on the dollar? You wouldn't get your whole amount but you'd get enough to maybe feel like you could walk away. What if he told you he could write you a lump sum check of $5k today? Maybe that makes it easier for you to walk away?

If there's any bad blood between you, small claims court will be somewhat torturous. And if you are at all thinking of going this way, I really do suggest you talk to a lawyer first to get their read on the situation and take their advice.
posted by amanda at 2:47 PM on January 18, 2013

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