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TJ, Esq.
TJ, Esq., Attorney
Category: Business Law
Satisfied Customers: 12133
Experience:  JD, MBA
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Hello, I am trying to make a contract with a friend of mine.

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Hello, I am trying to make a contract with a friend of mine. I am offering to give him 15,000 back in 3 months on a 10k loan. It has just come to my attention that a 50 percent loan will not hold up in court. I am looking for way to write this contract to ensure he can get his 15 from me in 3 months. I need to know what the legal interest limit is, I am willing to sign off that he gave me more money for a smaller interest to equal 15k or if we can have the amount and percentage be disclosed, or do we simply leave out the money part and just write and sign an agreement that simply states I will pay him 15ok in 3 months and not mention the loan , I just need to know what ever we can do to ensure he can legally get that 15 back and ensure him worry. Thanks.jason

Hello and thank you for allowing me the opportunity to assist you.

You’re correct … what you’re proposing would never hold up in court. You didn’t mention your State, so I can’t look up the legal interest rate, but it’s probably around 10-20% annually (there are exceptions for credit card companies, etc.). You’re proposing 50% in just three months, so that comes out to 200% annually. You’re way, way, way over the usury limit in any jurisdiction.

So, let’s say you sign a note that [falsely] states that he let you borrow $15,000. You won’t have the interest issue. However, if you refused to repay him and he sued, you could argue that you never actually got the $15,000. He’d then need to prove that you received the money. If he can only prove that you got $10,000, then that would be an issue for him.

Perhaps, along with the note, you could provide your friend with an affidavit admitting you received $15,000 of value in exchange for signing the note. Then, if there was a lawsuit, your friend could produce the affidavit to counter any claim by you that you did not receive the money.

But no matter what you sign, the botXXXXX XXXXXne is that you can always get out of it by filing for bankruptcy. To that extent, there is no way for you to 100% ensure your friend that you’ll remain legally liable for the entire $15,000.

Have I satisfactorily addressed your concerns? If not, then please feel free to ask for clarification. Also, if you added details in the “Optional Information” or “Already Tried” fields that I did not address in my answer, then I apologize. Questions are often posted for the experts to answer prior to the completion of those fields. Just let me know that I missed something pertinent and I’ll be happy to get back to you.

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