rippedoffbysis
New Member
Hello everyone! I am wondering if a verbal loan agreement is binding in smalls claims court? Here's the situation
In decemeber 2006 my sister, lives in Hawaii, called me wanting to borrow $2500 from me to use towards the down payment of a house she was trying to buy. I agreed to let her borrow $2500 from my credit card to use towards the purchase of her house. I wanted her to be able to purchase her first house so badly that I agreed that she could keep $500 as a gift from me towards the purchase and pay me back $2000 in installment loans of $125 starting April 2007. I did not get this in writing as I trusted my sister, big mistake.
She was to close on the house in January and when January rolled around she was denied financing. At the time I asked for my $2500 back and she said it was tied up in escrow and they had not released the funds yet. 30 days later they did release the funds and I once again asked her to send the $2500 back. She insisted she was still looking for a house and was going to use the $2500 towards a purchase still and she would send payments of $125 starting in April.
April came and went and she did not buy a house nor did she make a payment, nor did she contact me in anyway. Towards the end of April I starting emailing her and leaving her voicemails to contact me. She never did. Finally May 6th she left a message on my voicemail that she needed to send me a check and that we needed to discuss this in person and not leave messages for each other. I called right back and she answered the phone and said she needed to call me back she was at Sam's club and could not hear me.
I did not hear back from her nor did I receive a payment.
So May 15 I sent her an email requesting the full $2500 back that she had defaulted on the intial loan agreement and she had 30 days to send my money back or I would take legal action.
Finally 2 days later she called me back and to make a long story short, she was upset that I had the nerve to send her this email and also had the nerve to request all the money back. Things got worse with her and she basically told me that she spent the money and I couldn't get blood out of a turnip. So at that point, since she defaulted on our verbal agreement, I put together a new written loan agreement. This agreement is for a 2 year loan in the amount of $2500 charging 18% interest with a payment of $124.81 due the 18th of each month and I also stipulated any payment made after the 18th of the month would be considered late and subject to a $50 fee. I gave her 7 days to respond to me by either sending the $2500 or signing the loan agreement. I emailed the contract to her and also sent it certified return receipt requested. Ofcourse she has not responded to either.
I know that I must file in small claims court in Hawaii and have the paper work to file and I will have to make a trip to Hawaii for the court date. I also stipulated in the agreement if I had to seek legal action that I would seek travel expenses incurred to recover my money.
Before I spend money to go to Hawaii on this matter I need to know if a verbal agreement is legally binding in the state of Hawaii and how I would go about finding this out.
Thanks
In decemeber 2006 my sister, lives in Hawaii, called me wanting to borrow $2500 from me to use towards the down payment of a house she was trying to buy. I agreed to let her borrow $2500 from my credit card to use towards the purchase of her house. I wanted her to be able to purchase her first house so badly that I agreed that she could keep $500 as a gift from me towards the purchase and pay me back $2000 in installment loans of $125 starting April 2007. I did not get this in writing as I trusted my sister, big mistake.
She was to close on the house in January and when January rolled around she was denied financing. At the time I asked for my $2500 back and she said it was tied up in escrow and they had not released the funds yet. 30 days later they did release the funds and I once again asked her to send the $2500 back. She insisted she was still looking for a house and was going to use the $2500 towards a purchase still and she would send payments of $125 starting in April.
April came and went and she did not buy a house nor did she make a payment, nor did she contact me in anyway. Towards the end of April I starting emailing her and leaving her voicemails to contact me. She never did. Finally May 6th she left a message on my voicemail that she needed to send me a check and that we needed to discuss this in person and not leave messages for each other. I called right back and she answered the phone and said she needed to call me back she was at Sam's club and could not hear me.
I did not hear back from her nor did I receive a payment.
So May 15 I sent her an email requesting the full $2500 back that she had defaulted on the intial loan agreement and she had 30 days to send my money back or I would take legal action.
Finally 2 days later she called me back and to make a long story short, she was upset that I had the nerve to send her this email and also had the nerve to request all the money back. Things got worse with her and she basically told me that she spent the money and I couldn't get blood out of a turnip. So at that point, since she defaulted on our verbal agreement, I put together a new written loan agreement. This agreement is for a 2 year loan in the amount of $2500 charging 18% interest with a payment of $124.81 due the 18th of each month and I also stipulated any payment made after the 18th of the month would be considered late and subject to a $50 fee. I gave her 7 days to respond to me by either sending the $2500 or signing the loan agreement. I emailed the contract to her and also sent it certified return receipt requested. Ofcourse she has not responded to either.
I know that I must file in small claims court in Hawaii and have the paper work to file and I will have to make a trip to Hawaii for the court date. I also stipulated in the agreement if I had to seek legal action that I would seek travel expenses incurred to recover my money.
Before I spend money to go to Hawaii on this matter I need to know if a verbal agreement is legally binding in the state of Hawaii and how I would go about finding this out.
Thanks
