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Old April 3 2013, 02:04 PM   #7
Alidar Jarok
Everything in moderation but moderation
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Location: Norfolk, VA
Re: Family Member Owes Money. Advice?

I know everyone is saying talk to a lawyer. That may be required, but you also want to consider whether you want to sue a family member. That's usually not something that ends well (on the other hand, such a substantial loan doesn't usually end well either). You are right about the interest. It's not profit, it's a loss of what you could have had otherwise. Just through inflation, the money you get back is less than what you loaned in the first place.

My memory of Contract law is a bit fuzzy. If you did talk to a lawyer, the biggest thing to find out about is whether the statute of frauds applies (the rule that contracts lasting more than a year have to be in writing). I think you're OK because the contract wasn't guaranteed to last more than a year, it's just an indefinite contract. Proving the contract won't actually be that hard since several family members seem to know of its existence. Although, once again, do you want your whole family involved in a lawsuit against a family member? Also, since there's no repayment date, I wonder if he's even actually breached.

This is an unfortunate situation to be in. But it is worth asking if it's worth the problems associated with fighting to get repaid sooner. As long as you are still getting repaid, it's better than nothing.
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