Hayward, CA asked in Contracts for California

Q: a friend of mine borrowed 170k USD from me and I do have the agreement, but he did not pay me back, possible?

is it possible to get it back? i am in great debt and can't afford any expensive lawyer fee

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2 Lawyer Answers
Nathan Wirtschafter
Nathan Wirtschafter
PREMIUM
Answered
  • Encino, CA
  • Licensed in California

A: Business collection attorneys regularly use contingency fees in collection cases. Creditors typically do not wish to risk additional money on the promissory note, bill or receivable. Sometimes, creditors also believe that attorneys will work harder if their fee depends on the amount collected. In larger cases, some creditors find it less costly to pay their attorneys on an hourly basis.

The risk of collectability is a large factor in deciding whether to use an hourly fee or a contingency fee. For example, where a debtor has entirely ceased operations, the creditor’s attorney will probably want an hourly fee or a higher contingency. In some lawsuits, the attorney and client agreed to a hybrid arrangement, with a lower hourly rate plus a lower contingency fee.

In California, contingency fee agreements on collection cases must be in writing and conform to Business and Professions Code section 6147. The attorney-client agreement should also cover whether counsel or the creditor are responsible to pay court costs.

Generally speaking, if a creditor waits too long, the debt will not be recovered. The debtor will file for bankruptcy, leaving the creditor, along with others, quarrelling over the leftovers. In business collection, he who hesitate, loses.

Maurice Mandel II
Maurice Mandel II
Answered
  • Newport Beach, CA
  • Licensed in California

A: Typical Attorney Answer: Maybe. I agree with everything that Nathan said below. In your situation, whether you have to pay an attorney to assist you or not will depend on the financial status of the person to whom you lent your money. $170,000.00 is a very large sum of money. Apparently you lent it without receiving any security (like a trust deed securing your interest in real property).

You say that now you are in great debt, but apparently this was not the situation when you decided to mimic the Bank of America and give your valuable cash to someone who was not trustworthy to return the money.

This post is a CAVEAT to everyone, let the banks and financial institutions loan large sums of money to people, not you. If it is more money than you want to give away, just say NO.

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