Loaned money to friend for her car...

[gryndor]

What is the name of your state (only U.S. law)? California

My husband offered to help our friend by loaning her money to fix her car. We anticipated the repair to be about $500 which we were fine with losing if this person decided to flake on us. However, the repair is just under $2k now and more than the vehicle is worth, and (stupid decisions aside) that is not an amount that I am willing to be stiffed should the worst happen.

So my question is: if this friend defaults on the loan, is small claims with the promissory note our only option? Or can we file some kind of mechanics lien (we're not the mechanic, I know, but I didn't know if a third party could do something similar) or other lien against the car? and/or is repossession a possibility?

Thank you,
Gryn

 

[Just Blue]

What is the name of your state (only U.S. law)? California

My husband offered to help our friend by loaning her money to fix her car. We anticipated the repair to be about $500 which we were fine with losing if this person decided to flake on us. However, the repair is just under $2k now and more than the vehicle is worth, and (stupid decisions aside) that is not an amount that I am willing to be stiffed should the worst happen.

So my question is: if this friend defaults on the loan, is small claims with the promissory note our only option? Or can we file some kind of mechanics lien (we're not the mechanic, I know, but I didn't know if a third party could do something similar) or other lien against the car? and/or is repossession a possibility?

Thank you,
Gryn

I would ask for the amount less the 500 you were willing to lose if she decided to "flake on you"

 

[gryndor]

I would ask for the amount less the 500 you were willing to lose if she decided to "flake on you"

Obviously, we would like to be repaid the entire amount, hence the promissory note, but $500 won't destroy our budget if she decided to not pay. $2k would, and I am asking if I have any recourse beyond small claims.

I've been trying to find an answer to our specific situation online, and after sifting through countless posts about being a co-signer and the other stops paying, or how to deal with a repossession, and how to get out of debt garbage, I was hoping to talk to people who actually might have an answer. I'm not trying to waste your time.

 

[quincy]

Obviously, we would like to be repaid the entire amount, hence the promissory note, but $500 won't destroy our budget if she decided to not pay. $2k would, and I am asking if I have any recourse beyond small claims.

I've been trying to find an answer to our specific situation online, and after sifting through countless posts about being a co-signer and the other stops paying, or how to deal with a repossession, and how to get out of debt garbage, I was hoping to talk to people who actually might have an answer. I'm not trying to waste your time.

If you don't want to waste anyone's time, why don't you wait until your friend actually defaults on the loan to consider collection options?

It is entirely possible that the loan will be repaid in full.

That said, small claims is the remedy of choice when there is a dispute over small amounts of money. If you made sure to have all loan terms carefully spelled out in a dated and signed agreement, there should be no misunderstanding in the future as to what was agreed.

 

[Just Blue]

If you don't want to waste anyone's time, why don't you wait until your friend actually defaults on the loan to consider collection options?

It is entirely possible that the loan will be repaid in full.

That said, small claims is the remedy of choice when there is a dispute over small amounts of money. If you made sure to have all loan terms carefully spelled out in a dated and signed agreement, there should be no misunderstanding in the future as to what was agreed.

^^like^^

 

[latigo]

What is the name of your state (only U.S. law)? California

My husband offered to help our friend by loaning her money to fix her car. We anticipated the repair to be about $500 which we were fine with losing if this person decided to flake on us. However, the repair is just under $2k now and more than the vehicle is worth, and (stupid decisions aside) that is not an amount that I am willing to be stiffed should the worst happen.

So my question is: if this friend defaults on the loan, is small claims with the promissory note our only option? Or can we file some kind of mechanics lien (we're not the mechanic, I know, but I didn't know if a third party could do something similar) or other lien against the car? and/or is repossession a possibility?

Just curious, but is there some reason why you cannot simply flat out tell us if any money was in fact loaned and if so, how much? Because all you've stated is that your husband "offered to loan her money to fix her car" followed by a bunch of off the point, ifs" and "what ifs".

Anyway and whatever you could NOT file a "mechanic's lien" to secure any such loan of money. Not if you were the person or shop that repaired the car could you file a mechanic's lien. Such liens are possessory liens and attach to the vehicle at the time the vehicle owner is presented with a statement for the repairs and allow the workman or shop to hold the vehicle for payment. There is no formality such as a filing in order to claim the lien. (It is in the enforcement of the lien wherein lies the formalities.)

 

[gryndor]

Yes my husband offered a loan of whatever it costs to fix the car. The mechanic isn't done with it quite yet, but as he finds more wrong with it, the estimate for the bottom line adjusts. We are paying the mechic directly. The promissory note is for whatever the final amount of the mechanic's bill turns out to be. The reason there is little faith that this friend will pay is back is because she is a financial risk and it wasn't a good idea for my husband to make the offer. But here we are. So I thought worst case scenario, we're out $500-ish and we'll survive, but the damage to her car is much more extensive than anyone could have known from the start without pulling everything apart, and that final amount nearing $2k has me very concerned.

So I was asking about potential remedies besides small claims, and I suppose that's the only real answer. I'm a worrier and a simple answer to the question I actually asked would have helped me sleep at night.

I've been a part of this site for many years, and I've spent countless hours perusing for my own entertainment and edification, as well as legal questions of my own. The Senior Members here have always been hard asses but at least they used to answer the questions posed. The couple replies I received on my last few questions have been mocking and off-point. This site used to be helpful, now it's endlessly frustrating with nothing but useless quips. Which is a shame because it was such a great resource.

 

[quincy]

Yes my husband offered a loan of whatever it costs to fix the car. The mechanic isn't done with it quite yet, but as he finds more wrong with it, the estimate for the bottom line adjusts. We are paying the mechic directly. The promissory note is for whatever the final amount of the mechanic's bill turns out to be. The reason there is little faith that this friend will pay is back is because she is a financial risk and it wasn't a good idea for my husband to make the offer. But here we are. So I thought worst case scenario, we're out $500-ish and we'll survive, but the damage to her car is much more extensive than anyone could have known from the start without pulling everything apart, and that final amount nearing $2k has me very concerned.

So I was asking about potential remedies besides small claims, and I suppose that's the only real answer. I'm a worrier and a simple answer to the question I actually asked would have helped me sleep at night.

I've been a part of this site for many years, and I've spent countless hours perusing for my own entertainment and edification, as well as legal questions of my own. The Senior Members here have always been hard asses but at least they used to answer the questions posed. The couple replies I received on my last few questions have been mocking and off-point. This site used to be helpful, now it's endlessly frustrating with nothing but useless quips. Which is a shame because it was such a great resource.

FreeAdvice is still a great resource. Right now, though, your question falls into hypothetical territory. You are asking "what ifs" and we rarely address those on this forum.

Because you have already agreed to an open-ended loan (and you know this was a mistake), the best you can do is hope your friend pays back the loan. If she doesn't, you can take her to court and obtain a judgment - and, at that time, you could seek to attach her assets, of which the vehicle will be one.

Good luck.