Legally speaking

[Balldog]

Ok, a friend of mine has asked to borrow $2500. Not a problem, but I would like to get something in writing that she agrees to pay me back in 36 payments of $70. If I just type a letter and we both sign having it notarized am I legally covered?

I don't want her to just stop paying after a while and me be screwed. I don't know that she would but its better to be too safe I think.

[QuikSand]

This sounds like a bad situation top to bottom. Not legally speaking, just practically.

[corbes]

Yeh. Three years of payments on $2500? I don't know about that.

[Balldog]

If it was anyone else I really wouldn't do it but I understand the circumstances and the situation she is in.

[albionmoonlight]

Business with friends is messy.

My take: If you do not trust her enough to pay you back--then maybe you should not lend the money. Either don't give it to her, or make it a gift.

Legally speaking--contract law varies by state, but (generally) you don't even need to get it notarized. A legally binding promise is a legally binding promise.

But think--what does that give you? If she misses a payment, and you are depending on the contract to get your money back, your only real option at that point is to sue her. Could you do that? The contract is only useful to the extent that you want to/can enforce it. Again--business with friends sucks.

I can't give you any specific advice about your contract because legal ethics rules are pretty strict about conflicts. I work for the government now and can't really do anything that even smells like giving legal advice to a private party. So take my general life advice above for what it is worth.

Good luck.

[Grid Iron]

Ok, a friend of mine has asked to borrow $2500. Not a problem, but I would like to get something in writing that she agrees to pay me back in 36 payments of $70. If I just type a letter and we both sign having it notarized am I legally covered?

Albionmoonlight has some excellent advice. Beyond that, however, your proposal should do it. Good idea getting it notarized.

You might want to put something in there like if she falls behind by three months, the balance becomes due immediately. That way, if she misses three payments, you can take her to court right away.

For other ideas on how to enforce a loan, be sure to check out HBO's "The Sopranos" on Sunday nights! ;)

[rkmsuf]

Are going to provide a stub booklet?

[Samdari]

a friend of mine has asked to borrow $2500

Stop there. Friends and money don't mix. Just tell her you value her friendship too much to get involved in a financial relationship with her.

If she does sign such a letter agreeing to those payments, and she stops paying, you probably would be able to take her to small claims court and get a judgement that she owes you the money. That would probably get you no closer to getting paid.

I am assuming you are not qualified to determine her creditworthiness or debt/income ratio, so why would you extend her credit (especially at that interest rate)?

[JonInMiddleGA]

At the risk of being flagged for piling on ... the only way I'd say to approach this with a friend is IF you have zero expectation of being repaid. Otherwise, you are stepping into one of the most crowded minefields in life IMO.

The odds of something like this ending well are pretty small in my experience.

If you can live with not getting a dime back financially, and if you can live with that psychologically (in terms of keeping the friendship), then maybe this isn't the absolute worst idea in the world. Otherwise ... you're not only volunteering for problems, you're almost guaranteed to have problems.

Just my .02 FWIW,
Jon

[Franklinnoble]

I think there might be other arrangements you can make with a female friend.

[rkmsuf]

Just the fact you already are concerned would make me rethink this and/or the level of your friendship.

[clintl]

You need to watch some episodes of The People's Court.

[Samdari]

I think there might be other arrangements you can make with a female friend.

While I agree in principle with settling the debt in that way, I see several issues.

Balldog was asking about being able to legally get her to pay if she failed to. While he probably would if she was to repay in money, I have less optimism about his chances in court with this sort of arrangement. Our unenlightened society would regard even this harmless sex for money deal as prostitution, and could possibly, inexplicably, not require her to 'pay'.

Is she a $2500 worth? I am assuming somewhat less. If so, a value would have to be assigned to each 'payment', and a payment schedule worked out. Is Balldog qualified to evaluate the dollar value of such payments? And I think the question about her ability and willingness to pay are just as much in question here.

[samifan24]

Just to echo what others have said, friends and money don't mix. It's great that you're trying to help your friend out, but why can't she go through proper channels and get a loan from a bank? If she's coming to you for $2,500 I doubt she's explored all her options. If you want to do it, it's your call but I'd be very wary of the whole situation. Sure, she's your friend, but you have no way to guaranteee that you'll ever see that money again.

[Franklinnoble]

While I agree in principle with settling the debt in that way, I see several issues.

Balldog was asking about being able to legally get her to pay if she failed to. While he probably would if she was to repay in money, I have less optimism about his chances in court with this sort of arrangement. Our unenlightened society would regard even this harmless sex for money deal as prostitution, and could possibly, inexplicably, not require her to 'pay'.

Is she a $2500 worth? I am assuming somewhat less. If so, a value would have to be assigned to each 'payment', and a payment schedule worked out. Is Balldog qualified to evaluate the dollar value of such payments? And I think the question about her ability and willingness to pay are just as much in question here.
I dunno... what's the going rate for a hooker in Ohio? What's this girl look like? I'd guess he ought to get at least ten installments of full-contact intercourse for $2500, but I suppose you could find a way to pro-rate things like hand jobs and hummers...

[GrantDawg]

To join the pile on, never loan money to a friend. If she is in need and you have it(apparently you do since your willing to allow her a long period of time to repay), give her the money as a gift. Tell her she is under no obligation to repay, and if she does then that's gravy.

[Balldog]

I agree, I might have made a mistake saying I would loan her the money. I also made it a point to let her know that if she for some reason decides to try not to pay me back I will get my money back. And if that is the kind of friend she is then I don't want her being my friend anyways. She understands that, she's just going through a rough time right now so I am just trying to help her out.

Oh and I've had sex with her, it wasn't that great so the number of payments would have to at least double.

[Franklinnoble]

Oh and I've had sex with her, it wasn't that great so the number of payments would have to at least double.
The Ladies Man recommends you try doing it in the butt.

[rkmsuf]

I also made it a point to let her know that if she for some reason decides to try not to pay me back I will get my money back.

Was threatening to do it in the butt part of your point?

[Samdari]

The Ladies Man recommends you try doing it in the butt.

That's gotta be worth $500 per.

[Ragone]

Actually 2500 is over small claims court limit i believe..

But it varies from state to state no less.. so you might wanna keep that in mind

[stevew]

Maybe you could put your 2500 up as a collateral on a bank loan that she and you cosign on?

[Samdari]

Actually 2500 is over small claims court limit i believe..

But it varies from state to state no less.. so you might wanna keep that in mind

Most are higher than that now. If I count correctly, 45 of 50 states have limits (http://www.legal-forms-kit.com/legal-articles/small-claims-court.html) of 2500 or over.

[damnMikeBrown]

Good suggestion Stevew. I was going to offer up something similar, such as offering to co-sign a loan. It's still a sticky position, because if she defaults, it's your debt. You would not, however, be the lending institution, and then would not be responsible for collecting.

[Toddiec]

I just want to chime in as a loan officer. Good suggestion by damnMikeBrown and Stevew, but there are a couple of items with that type of loan. We have some loans like this where a CD is used as collateral. The CD is in one name, and the loan is in another. We have to get the CD owner to sign off on the loan because we are using his/her CD, so while you would not directly be liable for payments, we would just snag your CD if it went bad. The best thing that a bank loan like this can do for you is to make it "look" official (which sometimes does go a long way).

Long story short, in the end I will also have to pile on and agree with the comment that only make the loan if you can live with not seeing the money repaid. If you can go into it with this expectation, then there is no way you can be disappointed.

[korme]

tell her to repay you back in sex, when and where and how you want it, time and time again

[BlingBlingKilla]

You tripping if you gonna lend that kind of dough to a ho you been bumping uglies with!

She doesnt have parents or something? She doesn`t have a job? She can`t get a loan on her own?

Stay far as fuck away from this one man. Trust me.

[Mountain]

In order to make a contract legally enforcable you need an exchange of consideration (your $2,500 for her 36 payments at $70 a month) satisfies this requirement and a manifestation of mutual assent. Enforcable contracts can be spoken and not written. Almost everyone puts contracts in writing for purposes of proving a contract actually exists between the parties.

All you need is a simple paragraph outlining the details of the arrangement and your signatures and this should be sufficient to be enforced in every state. A couple of clauses I would add in there if I were creating this contract.

1) This was mentioned earlier but its called an accelration clause. Most of your car loans have them. An accelration clause states something to the effect of "if borrower misses a payment, the lender at his option has the right to demand the immediate payment of the entire lump sum remaining balance. You could even draft this to include any remaining unpaid interest amount that you would expect to receive if she makes the payments through the life of the loan. Its your contract.

2) Another clause I would add would be making her responsible for your attorney's fees and court costs should you have to take her to court to enforce the contract. Assuming she is has the ability to pay these costs (which is highly unlikely since she is asking you for money) this clause takes away any disincentive you may have caused by fear of spending good money to chase bad to enforce the contract.