Seeking Advice on Legal Action for Unpaid Loan Across Borders

[PorchCreate]

I loaned a significant sum of money to someone I met online less than 5 years ago to help them through a tough time. I am in Canada and they are in Kentucky, US. We had a written agreement and repayment plan, but they haven't made any payments. I want to pursue legal action but have some questions:

1. Is the statute of limitations for repayment based on the last agreement or any subsequent discussions about repayment? Would contacting them to discuss repayment reset the limitation?
2. They've changed contact information, but I found a possible address through Intelius. Any advice on locating them or other services?
3. Can I file a small claim online and attend court sessions online in Kentucky from Canada? The registration doesn't accept a Canadian address. Can I use a friend's US address, or do I need an official third-party service? Could using a friend's address be grounds for rejection by the court?

Thanks for any help!

 

[LdiJ]

I loaned a significant sum of money to someone I met online less than 5 years ago to help them through a tough time. I am in Canada and they are in Kentucky, US. We had a written agreement and repayment plan, but they haven't made any payments. I want to pursue legal action but have some questions:

Is the statute of limitations for repayment based on the last agreement or any subsequent discussions about repayment? Would contacting them to
discuss repayment reset the limitation?

Discussions generally do not extend the statute of limitations. Generally only the receipt of payments extends it. The statute of limitations for KY is 5 years.

They've changed contact information, but I found a possible address through Intelius. Any advice on locating them or other services?

You do have to be able to serve them for any lawsuit. Therefore you do have to locate them.

Can I file a small claim online and attend court sessions online in Kentucky from Canada? The registration doesn't accept a Canadian address. Can I use a friend's US address, or do I need an official third-party service? Could using a friend's address be grounds for rejection by the court?
Thanks for any help!

How much money are we talking about?

 

[Just Blue]

I loaned a significant sum of money to someone I met online less than 5 years ago to help them through a tough time. I am in Canada and they are in Kentucky, US. We had a written agreement and repayment plan, but they haven't made any payments. I want to pursue legal action but have some questions:

1. Is the statute of limitations for repayment based on the last agreement or any subsequent discussions about repayment? Would contacting them to discuss repayment reset the limitation?
2. They've changed contact information, but I found a possible address through Intelius. Any advice on locating them or other services?
3. Can I file a small claim online and attend court sessions online in Kentucky from Canada? The registration doesn't accept a Canadian address. Can I use a friend's US address, or do I need an official third-party service? Could using a friend's address be grounds for rejection by the court?

Thanks for any help!

When did you first "meet" this person?
When did you loan them the money?
How much did you lend them?
How did you obtain the written agreement...did you draw it up and send it to them and they then signed it and mailed it back to you?
Was this agreement notarized?

 

[PorchCreate]

Discussions generally do not extend the statute of limitations. Generally only the receipt of payments extends it. The statute of limitations for KY is 5 years.

So any payment they make could extend and avoid a lawsuit? They're most likely not in a strong financial situation, and I'm not in a particular rush to collect the full amount. It wouldn't bother me if they paid me back slowly over time. My main concern is that they never made any payments at all. My main goal is that I don't want the matter to expire and lose all ability to have recourse.

You do have to be able to serve them for any lawsuit. Therefore you do have to locate them.

I got their driver's license prior to the loan, but they moved a few times even during our chat. I found a match on Intelius, so I can hopefully obtain current address. I believe once a lawsuit is filed, I still have 30 days to perform service.

How much money are we talking about?

How much did you lend them?

The total amount paid was $418.05. The total amount they agreed to pay added up to $995, or whatever is the maximum amount legally enforceable. I was pretty aware this had a high risk and they repeatedly missed payments.

When did you first "meet" this person?

It was in 2017 when we first connected, and through 2018 we were chatting more.

When did you loan them the money?

The first payment was the very of 2018. The second and third were very early 2019. The final agreement we had was for the first repayment to be due on February 1st and the second on February 15th, 2019. Under the agreement, they were allowed to miss up to two payments before the entire amount became collectible. Prior to that, the agreement had defined penalties.

How did you obtain the written agreement...did you draw it up and send it to them and they then signed it and mailed it back to you?

The terms were fully detailed in written chat through Facebook Messenger along with the exact dates and amounts. They sent back a message with their full name. The chat is also full of promises and efforts to pay me back. As I said, they provided their driver's license. I also had a video chat with them to verify they were who they said. They responded with signing their full name in the chat.

Was this agreement notarized?

No. I don't believe that should be necessary for there to be an agreement.

 

[Just Blue]

Your agreement is not enforceable because it is illegal.

u·su·ry
[ˈyo͞oZH(ə)rē]
noun

1. the illegal action or practice of lending money at unreasonably high rates of interest:
   "the medieval prohibition on usury"
   Similar:
   payday lending
   extortionate moneylending
   shylocking
   • archaic
     interest at unreasonably high rates.

 

[Zigner]

Even if the agreement were enforceable, you'll likely spend a lot more dealing with it than you'll ever collect. You haven't worried about the money in 5 years, why worry now? Move on. Let it go. Que sera sera.

 

[adjusterjack]

Is the statute of limitations for repayment based on the last agreement or any subsequent discussions about repayment?

The SOL begins to run when the contract is breached.

Would contacting them to discuss repayment reset the limitation?

No.

KRS 413.265 suggests that an extension of the SOL requires written agreement. Not a discussion. Not a payment.

Kentucky Revised Statutes § 413.265 (2022) - Validity of agreements extending limitations periods :: 2022 Kentucky Revised Statutes :: US Codes and Statutes :: US Law :: Justia

I don't think you need to be concerned about the SOL at this point because the 5 year SOL applies to contracts not in writing. See 413.120 (1):

Kentucky Revised Statutes § 413.120 (2022) - Actions to be brought within five years :: 2022 Kentucky Revised Statutes :: US Codes and Statutes :: US Law :: Justia

Written contracts have a 10 year SOL. See 413.160:

Kentucky Revised Statutes § 413.160 (2022) - Actions upon written contract or not provided for by statute -- Ten-year limitation :: 2022 Kentucky Revised Statutes :: US Codes and Statutes :: US Law :: Justia

(Always pays to look up the statutes.)

They've changed contact information, but I found a possible address through Intelius. Any advice on locating them or other services?

Private investigator. Background check service.

Can I file a small claim online and attend court sessions online in Kentucky from Canada?

That's a question that can only be answered by the court clerk.

The registration doesn't accept a Canadian address. Can I use a friend's US address, or do I need an official third-party service? Could using a friend's address be grounds for rejection by the court?

You can probably print out the forms and complete them by hand and mail them to the court. I don't suggest playing games with addresses.

I was pretty aware this had a high risk

Just "pretty aware"?

I'd have guaranteed that you'd never get paid. What was it? An online infatuation with somebody who gave you a sob story? Probably a scam in the first place.

The total amount paid was $418.05.

Be thankful you didn't get taken for a lot more than that.

I agree with Zigner. Let it go. Chalk it up to a life lesson from the school of hard knocks. A lawsuit will cost you filing and process service fees. The defendant isn't likely to even show up. You'll get a default judgment that won't be worth the paper it's printed on. Deadbeats and scammers don't pay judgments.

 

[LdiJ]

In the end, it is likely to cost you more than they owe you to actually get a judgment against them, and even if you get a judgment, your odds of collecting are slim. The courts can give you a judgment but they don't do the collecting for you. The last thing you want to be doing is throwing good money after bad. Chalk it up to a life lesson and let it go.

 

[zddoodah]

I loaned a significant sum of money to someone I met online less than 5 years ago to help them through a tough time. I am in Canada and they are in Kentucky, US.

Does your use of "they" mean you lent this money to more than one person? Or do you not know your borrower's gender? If you don't know your borrower's gender, do you know his/her name? Do you really consider $418 (whether CDN or USD) to be "a significant sum of money"?

We had a written agreement and repayment plan, but they haven't made any payments.

Is the written agreement signed by both parties (or at least by the borrower)? You wrote in your follow up post that he/she "sign[ed] [his/her] full name in [a] chat" on Facebook Messenger, but I have no idea what that might mean. No payments...ever (your follow up posts suggests that some payments have been made)? When was the first payment due? When was the last payment due (or when does it become due)? When were any payments made? Does the written agreement have an acceleration clause (i.e., a clause that says that a missed payment results in the entire balance becoming immediately due and payable)?

Is the statute of limitations for repayment based on the last agreement or any subsequent discussions about repayment?

The statute of limitations begins to run as soon as a payment is missed, and I disagree with the person above who wrote that the making of payments resets the SOL.

Would contacting them to discuss repayment reset the limitation?

No.

They've changed contact information, but I found a possible address through Intelius. Any advice on locating them or other services?

Hire a private investigator (although that's not really practical based on the amount in dispute).

Can I file a small claim online and attend court sessions online in Kentucky from Canada?

I have no idea. Have you visited the website for the small claims court that covers the county in Kentucky where your debtor lives to find out whether these things are possible? Kentucky has 120 counties and 59 judicial districts. No one here is going to know what's possible in all of them.

The registration doesn't accept a Canadian address.

What does "the registration" mean?

Can I use a friend's US address, or do I need an official third-party service? Could using a friend's address be grounds for rejection by the court?

I have no idea what you're talking about. Please explain.

Your agreement is not enforceable because it is illegal.

u·su·ry

What are you basing this on? All we know is the amount lent and the amount to be repaid. Without knowing how long the repayment period was, it's impossible to conclude whether the interest rate was usurious. Also, a usurious rate does not necessarily make the agreement unenforceable. In some states, that's true. However, in others, a usurious rate simply gets reformed to the statutory rate or precludes the collection of interest (while the principal is still recoverable). Have you researched Kentucky law on this issue?

I agree with Zigner. Let it go. Chalk it up to a life lesson from the school of hard knocks.

I generally agree. I very much doubt most or any small claims courts in Kentucky are set up for remote appearances, so the travel costs (which won't be recoverable) will almost certainly exceed the amount at issue.

 

[Zigner]

Another question: How do you know that the person you sent the money to is even the person they claimed to be?

 

[PorchCreate]

Your agreement is not enforceable because it is illegal.

u·su·ry
[ˈyo͞oZH(ə)rē]
noun

1. the illegal action or practice of lending money at unreasonably high rates of interest:
   "the medieval prohibition on usury"
   Similar:
   payday lending
   extortionate moneylending
   shylocking
   • archaic
     interest at unreasonably high rates.

What are you basing this on? All we know is the amount lent and the amount to be repaid. Without knowing how long the repayment period was, it's impossible to conclude whether the interest rate was usurious. Also, a usurious rate does not necessarily make the agreement unenforceable. In some states, that's true. However, in others, a usurious rate simply gets reformed to the statutory rate or precludes the collection of interest (while the principal is still recoverable). Have you researched Kentucky law on this issue?

Thanks. My hope is that the specific clause "All debts are due to the maximum amount legally enforceable." will also help out here. I also honestly would also consider it a win to get the principle and court costs back.

Even if the agreement were enforceable, you'll likely spend a lot more dealing with it than you'll ever collect.

A lawsuit will cost you filing and process service fees. The defendant isn't likely to even show up. You'll get a default judgment that won't be worth the paper it's printed on. Deadbeats and scammers don't pay judgments.

In the end, it is likely to cost you more than they owe you to actually get a judgment against them, and even if you get a judgment, your odds of collecting are slim. The courts can give you a judgment but they don't do the collecting for you. The last thing you want to be doing is throwing good money after bad. Chalk it up to a life lesson and let it go.

Filing fee in small claims court is $30.
https://govt.westlaw.com/kyrules/Do...ansitionType=Default&contextData=(sc.Default)
"(a) Where the case or controversy does not exceed $2500.00, exclusive of interests and costs (Small Claims Court), the fees shall be $30.00; "

Serving him could be done by certified mail most affordably, under $20, if he cooperates to sign it. The other option is service using the sheriff which is available for $40-$50 depending on the district.

For $2, I have found his address on Intelius. From what I can tell from Intelius, multiple family members and he do both live there at the same address presently. I think it would be quite hard for him to avoid if the sheriff shows up at his home where both he and his family live.

It's a hard decision, and you're right it may not make sense for the amount of time it will likely take and the likelihood of collection, if I was only to consider raw resources of time and money.

However nothing is ever that simple. One factor to consider is what I can learn a lot through the experience, which might be useful in the future if I have to collect from anyone else or pursue something else in court. Another factor is a curiousity to know what's possible and to avoid what I feel could be a lasting nagging regret for not trying. I know what happens if I walk away. I imagine that in time I will not think about it as often. But there will always be this nagging question of what would have happened if I had chosen to pursue it. I will never know that answer.

In terms of collection, I have 15 years to figure this out. If he wants to stay unemployed and dodges everything for the next 15 years, that's up to him. I have no control over that. I can only choose what I have control over. It's also worth noting that I have other friends in Kentucky that I would like to visit at some point. So going on a "tour of the courthouse" or making a few stops around to file paperwork as part of my already planned trip, is possibly not as big of a cost.

In any case, I do not see a downside to collecting all the information so I can make the best informed decision. If I decide to walk away, it's a much less painful regret than if I just do nothing and let things lapse without making any decision. And if I get to the point of knowing I did everything I reasonably could, and still I lost, it feels a lot better than knowing I gave up. For example, if I checked on him in 10 years and he was successful with a nice job or something and no repayment - I don't know how I would feel.

You haven't worried about the money in 5 years, why worry now? Move on. Let it go. Que sera sera.

What leads you to believe I haven't worried about it at all for the last five years? It's complicated to figure out what to do. I really didn't want to have to go to court, more because of the impacts it could have to his life. I couldn't do that when I believed that he didn't have the means to pay but was trying and still intended to. I had 5 years, so why would I need to put a case together any earlier.

It's very different now that I saw he deleted his Facebook, changed his number, ignored emails, and is presently ignoring text messages and appears to be hanging up immediately whenever I call. That's pretty willful to me. To be clear, I haven't done anything obnoxious and if anything I've been too patient about it. So if he's not even going to talk to me about it now - I don't have the same worry about his life.

 

[PorchCreate]

The SOL begins to run when the contract is breached.

If we had built in written contingencies for up to two missed payments, I assume I'm correct that it doesn't count as a breach of contract until those contingencies are used up. The second payment was missed on February 15th, 2019, so am I correct that's when the breach would take place?

No.

KRS 413.265 suggests that an extension of the SOL requires written agreement. Not a discussion. Not a payment.

Kentucky Revised Statutes § 413.265 (2022) - Validity of agreements extending limitations periods :: 2022 Kentucky Revised Statutes :: US Codes and Statutes :: US Law :: Justia

The statute of limitations begins to run as soon as a payment is missed, and I disagree with the person above who wrote that the making of payments resets the SOL.

Thanks for the clarity. This would have been a handy way to convince him to make a payment to avoid the lawsuit. (So he at least pays something even if it's a token amount.) Getting an agreement seems like it should be easier than a payment based on past history. That's assuming I can manage to get ahold of him again, which is unfortunately proving elusive now.

I don't think you need to be concerned about the SOL at this point because the 5 year SOL applies to contracts not in writing. See 413.120 (1):

Kentucky Revised Statutes § 413.120 (2022) - Actions to be brought within five years :: 2022 Kentucky Revised Statutes :: US Codes and Statutes :: US Law :: Justia

Written contracts have a 10 year SOL. See 413.160:

Kentucky Revised Statutes § 413.160 (2022) - Actions upon written contract or not provided for by statute -- Ten-year limitation :: 2022 Kentucky Revised Statutes :: US Codes and Statutes :: US Law :: Justia

(Always pays to look up the statutes.)

Wow, thanks so much. That really changes things if it's true. From the title alone it does sound very promising. One thing that I'm worried about is the "unless otherwise provided by statute" in the wording, which reads like it might apply only to things not covered in the other statutes.

"An action upon a written contract executed after July 15, 2014, unless otherwise provided by statute, and an action for relief not provided for by statute can only becommenced within ten (10) years after the cause of action accrued."

This is pretty pivotal, so how could I be sure what applies?

Private investigator. Background check service.

Hire a private investigator (although that's not really practical based on the amount in dispute).

I did Intelius. I'm pretty sure I found where he's living with his family and the new address. The challenge is how to know for sure it's his address. My hope is that I can just get him to confirm or provide it, or that it's accurate enough. From Intelius, multiple members of his family appear to be living at that same address. From what I've heard, private investigators start around $500 in cost, which is pretty impractical for a small claim like this. I also have his email and phone number.

That's a question that can only be answered by the court clerk.

Here's what I believe is the right location:
https://www.kycourts.gov/Courts/County-Information/Pages/Madison.aspx
Am I correct I should contact "District Civil"?
District Civil, Mental Health, Probate Division & Forcible Detainers: 859-624-4723

You can probably print out the forms and complete them by hand and mail them to the court. I don't suggest playing games with addresses.

What does "the registration" mean?

I have no idea what you're talking about. Please explain.

The form in question is the online registration for their eFile service.

Here is the quote from https://ehelp.kycourts.net/start-here/:

You can either file conventionally at your local clerk’s office or electronically file your case. To file electronically, you will be required to create a user account on KYeCourts, the Kentucky Court of Justice’s online filing system. At this time, self-represented litigants are only able to electronically file small claims cases.

It seems to suggest the only option is electronic filing. When I go to register the account, I can set it up fine so far until I get to a screen with:

Required fields are marked by a red asterisk (*).

Address *
City *
State * (which has the options
Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming
Zipcode *
Phone
eMail *

The zipcode field will only allow number to be entered, and the State dropdown only has states which can be selected. As you likely know, Canada has postal codes with letters and provinces.

These are basically the only options I can see:
(1) Using a commercial mail forwarding service.
(2) Somehow get a post office box set up (and then have to check it).
(3) Using the address of a friend to receive any mail.
(4) Filling out the form with a state and using other values in the field.

I don't know what other options there are. This is kind of the most surprising stumbling block to me - that registration screen step is not even mentioned on the website. All the forms and paperwork involved in the case itself wouldn't have any issue providing the Canadian address that I can see once/if I complete the registration. I have no idea what they will even send by mail, if anything.

https://www.kycourts.gov/Legal-Forms/Legal Forms/175.pdf
https://www.kycourts.gov/Legal-Forms/Legal Forms/180.pdf

So I have no idea what the importance of that specific registration address on the eFile website is.

 

[PorchCreate]

Just "pretty aware"?

I'd have guaranteed that you'd never get paid. What was it? An online infatuation with somebody who gave you a sob story? Probably a scam in the first place.

I certainly strongly considered the prospect of not getting paid. I did everything I reasonably could to verify who he was and that he would have the means to pay me back. I have his driver's license. We had a video call. He was reportedly transitioning from one job to the next, however there was a gap and he was unable to cover the rent. I got details about the job and situation. I haven't been able to find any evidence that anything he ever told me about himself or his situation was a lie, and for what it's worth all the information I found from Intelius has lined up with everything he told me and was on his Facebook. Family members, past addresses, phone numbers, etc... He was arguably pretty careless with his personal information in what he shared, and as best I can tell all of it is real. It doesn't seem like someone who is planning out to execute a scam. While I know he was taking advantage of family to drive him to/from his job at one point (since he didn't have a vehicle), I never came across any evidence he took a loan from anyone else.

Be thankful you didn't get taken for a lot more than that.

Yes. I cut the "experiment" off after he had hundreds of dollars from his job saved up for his rent. I offered if he still made the first payment I could loan it right back to him, so he could avoid the penalties we'd agreed upon. It wouldn't have costed him anything, he had the money, and he could avoid an entire $95 penalty as we'd agreed. When he didn't do it, that told me everything I needed to know.

Does your use of "they" mean you lent this money to more than one person? Or do you not know your borrower's gender? If you don't know your borrower's gender, do you know his/her name?

It's a he. The use of "they" was most likely an attempt to help make the question more generic. I honestly didn't notice that I'd done that until you pointed it out. I will do my best to use he/him from henceforth.

Do you really consider $418 (whether CDN or USD) to be "a significant sum of money"?

I'm not sure how to answer that. I would say that's a significant sum to most people in the world. However, I understand that there are some people who make that daily or even hourly.

Is the written agreement signed by both parties (or at least by the borrower)? You wrote in your follow up post that he/she "sign[ed] [his/her] full name in [a] chat" on Facebook Messenger, but I have no idea what that might mean.

It's a Facebook chat message containing his full name in response to a message which requests him to type his full name if he agrees to the terms as laid out.

No payments...ever (your follow up posts suggests that some payments have been made)? When was the first payment due? When was the last payment due (or when does it become due)? When were any payments made? Does the written agreement have an acceleration clause (i.e., a clause that says that a missed payment results in the entire balance becoming immediately due and payable)?

Yes, there was an acceleration clause. There were no payments made. Not even in the case where he had the money and I offered I could lend the same amount right back to him just so he could avoid the penalty we agreed on.

I have no idea. Have you visited the website for the small claims court that covers the county in Kentucky where your debtor lives to find out whether these things are possible? Kentucky has 120 counties and 59 judicial districts. No one here is going to know what's possible in all of them.

I generally agree. I very much doubt most or any small claims courts in Kentucky are set up for remote appearances, so the travel costs (which won't be recoverable) will almost certainly exceed the amount at issue.

Here is the website:
https://www.kycourts.gov/Courts/County-Information/Pages/Madison.aspx
On the left side, there is "Remote Court: General Instructions".

In addition, here is a direct quote:
https://www.kycourts.gov/Courts/Pages/Remote-Court-Information.aspx

Remote court proceedings allow parties in a court case to use technology to participate remotely. The Kentucky Court of Justice began conducting proceedings remotely in March 2020 when the COVID-19 pandemic limited in-person events. This has ensured that the work of the courts can safely continue during the pandemic.

However, whether this applies to small claims or not I'm not sure how to determine for sure other than by calling.

Another question: How do you know that the person you sent the money to is even the person they claimed to be?

1) Photographed driver's license.
2) Video chat.
3) Other documents/screenshots provided throughout interaction.
4) Discussions with his friends.
5) Intelius. Information on the same person matches family members, phone numbers, and email addresses of the conversation.

 

[Zigner]

Okay let me ask what you feel is a reasonable interest rate or reasonable penalties for non-payment of the agreed upon amounts?

It will be defined in the statutes. You can research it now that you know the term to look for.

 

[PorchCreate]

Hi All,

Thanks again for all your help.

So I have been approved by the judge for remote court via zoom, which is great news. They said that as soon as it's filed and served, just tell the clerk it was approved. However, they still haven't helped with the eFile issue where I can't register the Canadian address.

Instead, they sent me to this URL:
kcoj.info/selfhelpportal

Which redirects to this page here:
https://www.kycourts.gov/Pages/index.aspx

Any idea where I'm supposed to go or what I should be doing here? Or is this a matter that they likely didn't understand the issue?