$20,785. There was never any demand, in writing, or orally for short-term repayment. I made oral commitment, and later in writing, that I would make repayment in "long-term", within five years, with 25% interest. Will I lose this case, and be required to make short-term payment (ie. wage garnishment)?
This would depend on the agreement in writing. Schedule a consultation with an attorney to review your contract/promissory note. Best of luck.
This response will not create an attorney-client relationship between you and The Law Office of Anthony Munoz, and is not intended to serve as a legal advice in your specific circumstances. This response is a legal opinion based solely on facts represented and you should not rely on this legal opinion as a legal advice. You still need to consult an attorney directly to fully protect your legal rights.
If she gave you the money, and you agreed to pay it back, but did not, then you will probably end up losing the case. She was not required to give you any written demand before suing. Your written commitment to repay her over 5 years with interest will be good evidence to support her claim to the money. The 25% interest may not be enforceable, but if she prevails, she can get 10% interest on any judgment. If she does get a judgment, she will be able to enforce it using various procedures, including wage garnishment, bank levies, etc.
If you have other debts, then it might be a good idea to talk with a bankruptcy attorney. Either way, you should talk with a local attorney that handles general, business, or contract cases. If you have been served with a summons and complaint, then you only have a limited amount of time to respond.
A court would uphold your oral agreement to repay the loan extended by your ex. Depending on what you and your ex say to the judge/jury, a "reasonable time," based on the totality of the circumstances, will be implied. You may be able to "sell" a 5-year time frame, but more likely, a court will imply a repayment timetable of 1-3 years.
A lawsuit to enforce an oral agreement must be commenced within 2 years of the agreement being breached. If the ex fails to file that lawsuit in time, she would still have recourse against you under your written promise to repay within 5 years. The deadline to bring a lawsuit under that written agreement is 4 years from when it is breached. It is unclear, based on the facts presented, when a breach of the written agreement will be deemed to have occurred.
If the ex secures a monetary judgment against you, wage garnishment will be an option to her to obtain payment of the Judgment.
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