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I lived with a woman in La Quinta, Ca. from 2006-2008. During the period I spent apx. $15,000 on materials for improvements on her 2 1/2 million dollar home and and provided all labor. I loaned her $20,000 which she refuses to pay back. She sold the home in the summer of 2008 and moved out of state. The loan was in the form of a check in her name from a whole life insurance policy of mine. The paperwork stated it was a loan. Do I have any recourse? Thank you for any assistance you can provide.
Optional Information: State/Country of Question: California Already Tried: I have tried nothing, just want to see if I have any options and that I have a case.
California has a 4 year statute of limitations for written agreement on a loan. The paper work you have is evidence of the written loan agreement. The statute of limitations would begin on the date payment was due. If your paperwork did not have a due date, then the statute of limitations has not run and you will be able to sue after you send a Demand letter requesting payment on a specified date. If the paperwork did have a due date, then that date is what controls the period of time you have to sue.As to the improvements to her house and materials supplied, unless you have evidence that she was to repay you for the work you did or the supplied materials, you would not have a case as she can argue that you made a gift of this to her property.
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The paperwork I have is in the form of a receipt from my insurance company which came with the check, it has her name on it and states it is a loan. There is no due date. The loan was in Oct. '06. Is that sufficient evidence? Am I entitled to the dividends that I surrendered by loaning her this money. I am told it could total $150.00 a month. I don't want the money for materials and labor, that was part of our rental agreement. In your professional opinion do I have a good case and what steps and avenues do I pursue before hiring an attorney? Can you also refer an attorney in the Palm Springs area? Thank you for your help.
That would be evidence since it shows that a loan was made with her name on it for her use. Since there is no due date, you will first need to issue a Demand letter with a due date to pay the loan amount and place her on notice that you will sue if she defaults by the due date. Unless you have it in writing that you would be entitled to dividends when making the loan, you would not have the right to ask for the dividends. Steps to take:1) Send a demand letter for payment and notice of your rights. Issue with a due date and then wait. Make sure you save copies and record of mailing (certified or registered mail).2) If there is no payment by the due date, then only recourse is to sue. Since this is more than $7,500.00 this is not a Small Claims case. But a case you file in superior court of unlimited jurisdiction.Unfortunately I don't have a referral to give you in that area. Best source is to contact the California State Bar lawyer referral for a specific attorney in that area.http://www.calbar.ca.gov/state/calbar/calbar_generic.jsp?cid=10182
Thank you. One last question. Is she required to report monies received from me as taxable income and report it as income to the IRS?
A personal loans is not considered taxable income, since it is only borrowed money that has to be paid back. It would become income if you forgave the debt.
I was referring to the rental money she received from me and the cost of construction materials, is that taxable income for her? Also will all the info you gave me be saved on my computer once I log off. Thank you again.
Thank you for the clarification.The rent you paid would be considered income.Cost of construction materials is not income so not taxable. However the the cost of the improvement must be capitalized. Yes, your question will remain with your account, even if you log off. My pleasure to have been of service.
Experience: Family, Juvenile Dependency, Criminal, Probate Just Answer Legal Mentor