What to do about a family loan and getting repaid?
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What to do about a family loan and getting repaid?
I have been living with my family for several years and have been paying rent since I turned 18. However, I have also been allowing my family to “borrow” money. Over the course of 3 years the amount “borrowed” has accumulated to slightly over $20,000. I fear that they have no intentions of paying it back to me and have been recently kicked me out of the house due to my refusing to pay them more money via borrowing. I have been keeping notes of the amount borrowed, the date and the reason behind why they wanted to borrow or a significant event that happened to help them remember the day. I did not get a signature from them. Can I take them to court for this?
Asked on September 17, 2014 under Bankruptcy Law, Hawaii
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 10 years ago | Contributor
You can try to sue them: an oral (or verbal; i.e unwritten) agreement to repay a loan is enforcable. The problem may be proving it: for money to be a loan to be repaid, and not, say, rent or a gift, both parties must clearly understand when the money was given that it must be repaid, and there must have been repayment terms (i.e. when it was due; any interest; etc.) If there was no agreement as to those terms, or if the family will simply lie and claim the money was gifts or rent, a court may conclude that the money was gifts or rent, not a loan. The facts do not help you: you have clearly been paying rent to your family, so the money could be additional payments; the payments were made to family with whom you live, so it could be gifts. This is not to say that you can't win, or shouldn't try, but the lack of a written agreement in a case like this definitely hurts.
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