The new forums will be named Coin Return (based on the most recent vote)! You can check on the status and timeline of the transition to the new forums here.
The Guiding Principles and New Rules document is now in effect.
Collecting on a personal debt (Alberta)
vsove
....also yes.Registered User regular
....also yes.Registered User regular
Alright, I've been doing a little research on behalf of a friend of mine, and all my attempts have been rather fruitless. So I turn to you, H/A, to answer this question for me.
The gist of it is a friend of mine lent some money to her (then boyfriend) some time ago, so that he could pay off his debts and avoid the interest killing him. She wrote up a contract, had the other party sign/date it and then proceeded to start a repayment schedule. It changed once, though I'm not entirely sure what prompted the change, but for the most part it was civil and agreeable. Every month she'd get her payment and they'd both sign to show that it was done.
Now the issue is that the guy is suddenly saying how he can't repay it, and trying to suggest that the entire thing is my friend's fault in some strange, backwards way. He wants to take a break from repaying my friend, who just wants to have the whole thing over with and doesn't want to deal with this guy more than is necessary, so she's resistant to changing the schedule at this point in time.
I've met the guy a couple of times, and the impression I get from him is that if she doesn't give him the break, he'll throw a tantrum and tell her she's not getting her money back until he's good and ready, whenever that is. Now my friend is wondering what her options are in the event that he doesn't repay her, or if there's a way beyond a simple contract to have some kind of legal backing on her side so she can stop getting stressed out over the entire situation.
My understanding is that the only way she's going to be able to force this guy to repay her is to take him to small claims court, but unless he's violating the terms of the contract and attempting to default, I don't think she really has much she'll be able to do in terms of legal recourse - then again, I am not a lawyer, so I may be mistaken. What she wants to know is if there's a way to authorize a third party to take on the collection process for her - she understands that this will mean she'll lose part of the loan to whatever company it is, but she figures she'd rather do that and not have to worry about it anymore, as opposed to having to deal with the guy.
So my two questions are first of all, is there any agency that could be authorized to deal with this debt on her behalf? My research into collection agencies seems to suggest that they deal almost exclusively with business-to-business debt, or creditor-to-person debt as opposed to person-to-person debt - not to mention that I don't know the requirements in terms of documentation for a third party to deal with this debt on her behalf. I suspect what she has is sufficient for small claims court but insufficient for anything else.
Which brings me to my second question. At what point can she take this guy to small claims court for non-payment of the debt? He has been paying it off in the agreed-upon payment schedule, but now he wants a break as his own financial situation is apparently not the best. However my friend knows that this is an issue of him not having managed his money well (buying a lot of non-necessities, such as gaming consoles, electronics, etc.), as opposed to him genuinely being in a situation where proper financial management still isn't enough to allow him to fulfill his obligations.
So if she refuses to give him the break and he's unable to pay, does she have legal recourse, or is there a certain period of non-payment that must occur before he can be taken to court? On the flip side, if she does give him a break and draws up a new contract that gives him a very firm payment schedule and no more breaks, will she be able to take him to court if he still insists on more breaks? Like I said, I'm not a lawyer, and my efforts to find the appropriate information have been fruitless, so any help from others would be greatly appreciated.
And just to pre-empt it, I've already mentioned to her that in the future, she really shouldn't lend money out for exactly these reasons - it's hard to collect and it can cause a lot of strain on interpersonal relationships, so while that advice is definitely good, it has already been given.
The gist of it is a friend of mine lent some money to her (then boyfriend) some time ago, so that he could pay off his debts and avoid the interest killing him. She wrote up a contract, had the other party sign/date it and then proceeded to start a repayment schedule. It changed once, though I'm not entirely sure what prompted the change, but for the most part it was civil and agreeable. Every month she'd get her payment and they'd both sign to show that it was done.
Now the issue is that the guy is suddenly saying how he can't repay it, and trying to suggest that the entire thing is my friend's fault in some strange, backwards way. He wants to take a break from repaying my friend, who just wants to have the whole thing over with and doesn't want to deal with this guy more than is necessary, so she's resistant to changing the schedule at this point in time.
I've met the guy a couple of times, and the impression I get from him is that if she doesn't give him the break, he'll throw a tantrum and tell her she's not getting her money back until he's good and ready, whenever that is. Now my friend is wondering what her options are in the event that he doesn't repay her, or if there's a way beyond a simple contract to have some kind of legal backing on her side so she can stop getting stressed out over the entire situation.
My understanding is that the only way she's going to be able to force this guy to repay her is to take him to small claims court, but unless he's violating the terms of the contract and attempting to default, I don't think she really has much she'll be able to do in terms of legal recourse - then again, I am not a lawyer, so I may be mistaken. What she wants to know is if there's a way to authorize a third party to take on the collection process for her - she understands that this will mean she'll lose part of the loan to whatever company it is, but she figures she'd rather do that and not have to worry about it anymore, as opposed to having to deal with the guy.
So my two questions are first of all, is there any agency that could be authorized to deal with this debt on her behalf? My research into collection agencies seems to suggest that they deal almost exclusively with business-to-business debt, or creditor-to-person debt as opposed to person-to-person debt - not to mention that I don't know the requirements in terms of documentation for a third party to deal with this debt on her behalf. I suspect what she has is sufficient for small claims court but insufficient for anything else.
Which brings me to my second question. At what point can she take this guy to small claims court for non-payment of the debt? He has been paying it off in the agreed-upon payment schedule, but now he wants a break as his own financial situation is apparently not the best. However my friend knows that this is an issue of him not having managed his money well (buying a lot of non-necessities, such as gaming consoles, electronics, etc.), as opposed to him genuinely being in a situation where proper financial management still isn't enough to allow him to fulfill his obligations.
So if she refuses to give him the break and he's unable to pay, does she have legal recourse, or is there a certain period of non-payment that must occur before he can be taken to court? On the flip side, if she does give him a break and draws up a new contract that gives him a very firm payment schedule and no more breaks, will she be able to take him to court if he still insists on more breaks? Like I said, I'm not a lawyer, and my efforts to find the appropriate information have been fruitless, so any help from others would be greatly appreciated.
And just to pre-empt it, I've already mentioned to her that in the future, she really shouldn't lend money out for exactly these reasons - it's hard to collect and it can cause a lot of strain on interpersonal relationships, so while that advice is definitely good, it has already been given.
WATCH THIS SPACE.
vsove on
0
Posts
If she really feels that he is going to stop paying her, and that he is buying alot of luxeries, then maybe she should ask for some collateral before she makes any changes to the repayment schedule.
Collection agencies generally buy out someone elses debt for a fraction of their worth, depending on how trust worthy the borrower is, so they might only give your friend 10% of what is left of the debt, since they are most likely never going to be able to collect from this guy or even bother with it if he refuses to pay.
Even if the guy does decide to default, and your friend tries to take him to small claims, the system setup here in Canada will let him keep repeatedly postponing the court dates for long enough that your friend wont even want to bother with the collection anymore.
MWO: Adamski
Thanks again!
As far as I'm aware, what makes a contract legally binding is not who wrote it, but the way the contract itself is written as well as inclusion of things such as consideration. Again, I am not a lawyer, but my only concern in her case is that the contract itself may not be enforceable due to how she wrote it, not because she wrote it. Thus why contract law is such a big thing - it's very easy to leave someone an out within a contract because of poor choice of language or poor wording.
Though in the case of an outstanding debt, I believe that the purpose of the contract, if she were to take it to court, would be less to say 'this contract is completely enforceable' so much as it is to say 'this is how much he owes me, written down in black and white and signed by both of us'. She's also kept records every month of how much she's received so the fact that the debt exists and has not been paid off is fairly evident.
Like I said, though, I'm going to recommend she gets some free legal advice and see where things go from there. I don't mind giving her basic advice but anything too complex, I don't know the ins and outs enough to be confident that what I tell her is correct.
Most contracts don't even need to be written to be legally enforceable.
I was made aware of a second situation that almost makes me want to take you up on this :P But it looks like she's going to go about this the right way - getting him to sign a new contract (since he wants to take some time off from paying as he apparently lost his job) and cutting off any contact with this guy outside of in a strictly business capacity. I took a look at the contract she originally wrote up, and it seems fine, but I made sure the new one was a lot more explicit about what the responsibilities of the various parties are. I think the guy is reasonable enough to deal with this outside of court, but if not then as far as I can tell she's got enough documentation and such to walk into court, hand it to the judge and walk out fifteen minutes later with a court order to get her money back.
I told her to talk to an actual lawyer, though, and she seems receptive to the idea, so we'll see how it goes from there.
Besides the legal small claims court, you could always try peer pressure. Do you know any of his friends? you might try working though one of them to see if they can act as a "middle man" to help you resolve it. you know... grease the wheels a little bit.
It's a fair bit of money, and I don't know any of this guy's friends. Hell, until the other day I didn't even know the guy, but my friend didn't have anyone else to really turn to, so here I am. I'm comfortable with the course of action she's taking, and if he ends up defaulting then I'll cross that bridge when I get to it.