is it possible in some way to make a quick legal contract to lend money?

[12345678]

basically I want to loan some money to a friend of mine

 

he says that he will return it to me, but I don't trust him that much (I trust nobody), but also it's not like an amount of money that I can't lose so...

 

so I wanted to know if there's like a fast legal way to lend him some money, so in case he doesn't want to give me back the money, I'm protected in some way, 

[Middcore]

Since you don't trust him and it's clearly going to become an issue in your relationship, just don't lend him the money.

 

Asking him to sign a contract is as good as telling him to his face you don't trust him and is pretty insulting. Any contract would also be worthless unless you are prepared to actually take him to court to enforce it. 

[12345678]

14 minutes ago, Middcore said:

Since you don't trust him and it's clearly going to become an issue in your relationship, just don't lend him the money.

 

Asking him to sign a contract is as good as telling him to his face you don't trust him and is pretty insulting. Any contract would also be worthless unless you are prepared to actually take him to court to enforce it. 

well I don't care

 

then a way to make sure that he pays back, or that like the bank coveres for me or whatever?

maybe a cashback might work?

 

there are people who waste money over overexpensive dinners at the restaurant, those who get at Starbucks, I once in a while I do like playing at the lottery with risky stuff because I'm an idiot

 

[tikker]

35 minutes ago, 12345678 said:

so I wanted to know if there's like a fast legal way to lend him some money, so in case he doesn't want to give me back the money, I'm protected in some way, 

  Check local laws, but a written contract you both sign should be legally valid. You will of course have to go to a form of court if it's violated and you want it enforced.

23 minutes ago, Middcore said:

Asking him to sign a contract is as good as telling him to his face you don't trust him and is pretty insulting. Any contract would also be worthless unless you are prepared to actually take him to court to enforce it. 

Lending money can easily turn into a shitshow as well, family and friends doubly so because of trust issues. In whatever case, if it's a sizeable amount of money, and since they ask I assume it's a non-trivial amount, then a contract is a smart idea. It depends on the amount of money being lent and the level of friendship and the person's history of paying things back of course. A small amount (this amount will be subjective) I wouldn't mind, but significant sums as I said, no matter what my financial status is, I would probably also like some form of arrangement set for. I don't care if it's 1 year or 5 years, just something that I can hold you to or take into account for the next time.

 

10 minutes ago, 12345678 said:

then a way to make sure that he pays back, or that like the bank coveres for me or whatever?

maybe a cashback might work?

That making sure is what contracts and courts are for. The bank has no reason to cover for you since it's a voluntary transaction from you to the borrowing party.

 

Another option is to ask for collateral. They get the money, you get something valuable from them in return to hold until they pay the loan back. If they don't pay up before the agreed-upon time expires, the valuable item will go on eBay. A confirmation of the agreement, even it's over text or similar, is still a smart idea should you ever need to defend selling said collateral.

[Spotty]

7 minutes ago, 12345678 said:

then a way to make sure that he pays back, or that like the bank coveres for me or whatever?

maybe a cashback might work?

No. The bank is not responsible for the bad decisions you make with your money. If you want the loan backed by a bank then don't lend your friend money and tell them to go get the loan from the bank instead. Is there any reason why your friend doesn't get a loan from the bank?

[dalekphalm]

1 hour ago, 12345678 said:

basically I want to loan some money to a friend of mine

 

he says that he will return it to me, but I don't trust him that much (I trust nobody), but also it's not like an amount of money that I can't lose so...

 

so I wanted to know if there's like a fast legal way to lend him some money, so in case he doesn't want to give me back the money, I'm protected in some way, 

Yes of course you can write up a legal contract with all impertinent details.

 

I would include the name and address of each person and their relationship to the contract (eg: the Loaner and Loanee, etc). Include the amount being lent, and the repayment terms. Also include any terms for breach of agreement (eg: if you fail to deliver the money in a timely manner, and if they fail to meet a payment, etc).

 

But let's be honest, depending on how much the money is, if he really wants to skip out on the loan, there's not much you can do to force him to pay. Taking him to court may work, and even get you a ruling, but unless they garnish his pay, it's hard to force them to repay against their will.

 

Anyway the point to that was simple: Don't loan them money you cannot absolutely afford to lose forever. Write the contract and hold him accountable to the loan, but treat it as a gift mentally.

[dalekphalm]

1 hour ago, Middcore said:

Since you don't trust him and it's clearly going to become an issue in your relationship, just don't lend him the money.

 

Asking him to sign a contract is as good as telling him to his face you don't trust him and is pretty insulting. Any contract would also be worthless unless you are prepared to actually take him to court to enforce it. 

If a friend wants to borrow money (I'm talking serious money, not $20), and writing up a contract insults them? They need to grow up. That's not insulting at all, it's being an adult and making the terms of the loan clear to all parties.

 

With that in mind, I agree with you that the contract isn't worth much unless you go to court, and even then it won't likely be an easy process to get the money back.

[12345678]

1 hour ago, Spotty said:

No. The bank is not responsible for the bad decisions you make with your money. If you want the loan backed by a bank then don't lend your friend money and tell them to go get the loan from the bank instead. Is there any reason why your friend doesn't get a loan from the bank?

he lives in a shithole, and his parents have likely destroyed its credit let's say

the money that I would give to him, would pretty much cover the travel expensives to come back here

 

frankly I don't even care if he doesn't pay back the money, for me he can sum up if helps me in other ways when I need something, like idk I need to change house, then an help for the transport of stuff

 

but how can I say... I can help him out, but I also don't want to look like an atm idiot, that's not quite it, but it's the closest thing that I can think about that express what I would like to say? 

[Neroon]

If you don't care if he pays you back, why want a contract?

 

This just feels like overcomplicating things.

 

I would only bother with a contract when we are talking very serious amounts, amounts that I can't loan out btw, but for example when someone buys a house and you front a large amount. But if we talk traveling money... man don't do that. Just tell him to pay you back and if he doesn't, you will make him work his ass off for you. Leave it at that.

[Middcore]

1 hour ago, 12345678 said:

 frankly I don't even care if he doesn't pay back the money

You keep saying this but it's clearly not true or you wouldn't be asking about legal mechanisms to make sure you get paid back.

[Beerzerker]

1 minute ago, Middcore said:

You keep saying this but it's clearly not true or you wouldn't be asking about legal mechanisms to make sure you get paid back.

Why does the phrase "It's a trap" keep going through my mind here after reading through this?
 

[Needfuldoer]

Either consider it a gift or don't lend him the money.

[bondoao1]

I skipped reading comments so I don't know if this was covered. 

This info is dependent on where you live. 
Here in So. Cal. USA, this is how things work.

 

Yes you can do a contract for a personal loan from private party to private party. 
If there is an issue of no payment, and the amount owed is $10,000 or less the only legal option available is Small Claims Court.

 

In order to sue someone in SCC, first a clerks fee must be paid (between $30-$75).

Once court preceding's have occurred, the filing party has to pay a judgment fee dependent on how much the judgement was for. 

the looser is allowed to file an appeal should they desire.

Should you take someone to small claims court, and you win say a $1000 judgment, there is no real way for you to collect your money if the person doesn't want to pay. Even the court system tells you this.

 

From the California small claims court website:
"The court will not collect the money for you. But the court will issue the orders and other documents you may need to collect your judgment from the debtor (the party that owes you money). Keep in mind that not all judgments are collectable because the debtor may not have any income or property of value."

 

In other words now you are out even more money since you had to pay the court fees on top of the money you lent and did not get back, so my advise is to not lend money unless you plan on not getting it back.

[tikker]

23 hours ago, 12345678 said:

he lives in a shithole, and his parents have likely destroyed its credit let's say

the money that I would give to him, would pretty much cover the travel expensives to come back here

 

frankly I don't even care if he doesn't pay back the money, for me he can sum up if helps me in other ways when I need something, like idk I need to change house, then an help for the transport of stuff

 

but how can I say... I can help him out, but I also don't want to look like an atm idiot, that's not quite it, but it's the closest thing that I can think about that express what I would like to say? 

It sounds like you do want enforced compensation in some shape or form though. A contract would be the most straightforward to enforce. Without it, the longer it drags out the more difficult it will become to get it back. If you don't want to feel like an ATM then a contract will make it clear that you're not just a bank to withdraw money from, but that it is a loan that is expected to be returned once their situation improves.

  

58 minutes ago, bondoao1 said:

Should you take someone to small claims court, and you win say a $1000 judgment, there is no real way for you to collect your money if the person doesn't want to pay. Even the court system tells you this.

 

From the California small claims court website:
"The court will not collect the money for you. But the court will issue the orders and other documents you may need to collect your judgment from the debtor (the party that owes you money). Keep in mind that not all judgments are collectable because the debtor may not have any income or property of value."

What the court quote there tells you is that you may not get compensation in a situation where they can't pay. I would be very surprised if they are allowed to refuse a court order because they don't want to pay.

[wasab]

If your friend declares bankruptcy and have zero net asset that can be liquidated to repay their outstanding debt, you can pretty much kiss your money forever good bye. The court will legally stop you from ever collecting the debt in the future. This is why banks charge so much interest rate on unsecured debt e.g. credit cards but offers much lower interest rate on secured debts that are collateralized such as a mortgage back by a house or margin back by a persons stock portfolio. 
 

if they declared bankruptcy, any unsecured debt gets discharged.

[Avocado Diaboli]

Are you about to fall for one of those "importing a bride from eastern Europe" or "Tinder swindler" scams? Because it sure sounds like that and not in the slightest like you're just intent on helping out a friend in a jam. If you care about the money, make a contract. If you don't care, don't make a contract. Why all this back and forth over nothing? If it's just travel expenses, it's hardly a life altering amount of money to lose. And if it is, you're in no position to be handing out money you can't afford to lose. So tell us, what did the guy hiding behind the pretty lady avatar on that dating app say?

[dalekphalm]

2 hours ago, tikker said:

What the court quote there tells you is that you may not get compensation in a situation where they can't pay. I would be very surprised if they are allowed to refuse a court order because they don't want to pay.

I think what that quote is saying is specifically that the Court itself does not collect the money, therefore, it's not so much that they can "refuse" the court order to pay, but rather - what are the consequences for not paying? If the court won't force collection for you, and the loanee isn't paying, there's not too much you can do.

 

You could always farm it out to a collections agency, but I imagine that you won't get much of a return on that.

[12345678]

1 hour ago, Avocado Diaboli said:

Are you about to fall for one of those "importing a bride from eastern Europe" or "Tinder swindler" scams? Because it sure sounds like that and not in the slightest like you're just intent on helping out a friend in a jam. If you care about the money, make a contract. If you don't care, don't make a contract. Why all this back and forth over nothing? If it's just travel expenses, it's hardly a life altering amount of money to lose. And if it is, you're in no position to be handing out money you can't afford to lose. So tell us, what did the guy hiding behind the pretty lady avatar on that dating app say?

it's about cocaine man

just kidding 

[tikker]

1 hour ago, dalekphalm said:

I think what that quote is saying is specifically that the Court itself does not collect the money, therefore, it's not so much that they can "refuse" the court order to pay, but rather - what are the consequences for not paying? If the court won't force collection for you, and the loanee isn't paying, there's not too much you can do.

 

You could always farm it out to a collections agency, but I imagine that you won't get much of a return on that.

I agree. I was focusing more on the "if the person doesn't want to pay" bit, which I think wouldn't fly,  but yeah I wouldn't expect the court to watch them until they pay you although the other party can of course be annoying and abuse that, requiring additional legal effort on your side to make them pay (assuming they can and simply don't want to).

[Wictorian]

Here there is a template for such a document.

 

Paypal and credit cards offer cashback however im not sure if credit cards would work in this case.

[bondoao1]

18 hours ago, tikker said:

I agree. I was focusing more on the "if the person doesn't want to pay" bit, which I think wouldn't fly,  but yeah I wouldn't expect the court to watch them until they pay you although the other party can of course be annoying and abuse that, requiring additional legal effort on your side to make them pay (assuming they can and simply don't want to).

From experience of a family member who won a small claims court ruling, the losing party blatantly said they were not going to pay and there was no way for my family member to collect without spending more money.
That is why my suggestion is that if you decide you want to lend someone money, don't count on getting it back. 

I have found that there is usually a reason a "friend" will ask another friend for a loan, and it is typically that they have burned every other bridge.
 

[tikker]

56 minutes ago, bondoao1 said:

From experience of a family member who won a small claims court ruling, the losing party blatantly said they were not going to pay and there was no way for my family member to collect without spending more money.
That is why my suggestion is that if you decide you want to lend someone money, don't count on getting it back. 

I have found that there is usually a reason a "friend" will ask another friend for a loan, and it is typically that they have burned every other bridge.
 

Ah that sucks. Yeah I guess in such cases you'll end up with endless legal battles since they don't do the collection part for you. Close friends I'd have no problem lending money, but in other cases out of the blue I'd also be at least a little curious as to why.

[12345678]

why does every simple question get into an endles argumentative thing 

[tikker]

1 hour ago, 12345678 said:

why does every simple question get into an endles argumentative thing 

What fun is the forum otherwise. In reality though, legal questions are never simple. The answer will pretty much always be "it depends" and you should go to a local attorney or something that is a government or legal (advice) office if you want a real answer.

[bondoao1]

20 hours ago, 12345678 said:

why does every simple question get into an endles argumentative thing 

The question was not as simple as it seems, and the above comment explaining that is correct.

Argumentative? I have not seen an argument in this thread yet, only a conversation.