My father once told me, "never
lend money to family unless you never intend to be repaid." These wise
words will always ring somewhat true. Family often presents an attractive vehicle to borrow
money on very attractive terms. However, when the proverbial 'crap hits the
fan' is when we all find out the density of blood. Over the years, I had the
opportunity to counsel, represent, and litigate the many issues of money. Tens
and hundreds of thousands of dollars is by no means considered 'nominal'
consideration. Some of these loans have been for cars, businesses, houses,
weddings, debts, and crimes. The issues presented are more than dollars and
sense...they are emotional, passionate and contentious. But, what happens when
the business fails; the debt re-accumulates; or, the marriage falls apart into a divorce? The loan
is still the loan, right? Sometimes, the new circumstances create changed ‘feelings’
about the obligations of the debtor. Sometimes, lawyers get involved. And,
sometimes, legal challenges may favor the debtor, which allow him/her to avoid their
debt. Or even worse, the debt turns the relationship into something tougher
than a two dollar steak.
On the other hand, family loans between consenting parties may help build trust, improve relationships and create positive change. As with all contracts, all parties must fully understand the nature, consequences and details of the agreement. Expectations and intent must be clearly expressed and acknowledged. Most importantly, the contract must be in writing and signed. I strongly advise that the parties seek out the assistance of a lawyer and not simply download a form on the internet. A lawyer offers a witness to the transaction; contractual language which complies with state laws; and, offers a formality to the transaction that stresses the importance of the loan for the parties.
For some additional tips and information go to: http://www.moneycrashers.com/lending-money-family-friends/
On the other hand, family loans between consenting parties may help build trust, improve relationships and create positive change. As with all contracts, all parties must fully understand the nature, consequences and details of the agreement. Expectations and intent must be clearly expressed and acknowledged. Most importantly, the contract must be in writing and signed. I strongly advise that the parties seek out the assistance of a lawyer and not simply download a form on the internet. A lawyer offers a witness to the transaction; contractual language which complies with state laws; and, offers a formality to the transaction that stresses the importance of the loan for the parties.
For some additional tips and information go to: http://www.moneycrashers.com/lending-money-family-friends/
Jonathan J. Moriarty, Esq.
Law Office of Jonathan J. Moriarty
53 South Main Street, Ste. 3
Randolph, MA 02368
Telephone: (781) 961-2200
Facsimile: (781) 961-0017
Email: jjmoriarty@verizon.net
Website: www.attorneymoriarty.com
