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I have a question regarding a verbal agreement on a loan. A former employer loaned me some money, with the understanding that I would pay a certain amount each pay period. After leaving the position, I have continued to make payments on time and am completely up to date. She has now decided to change the terms and wants the remaining balance immediately. I am not in a position to give her the full amount, but plan to continue paying her as agreed. She has informed me that she is "taking legal action" if the full amount isn't paid by the end of today (July 1). I feel that I am doing the right thing, but am a little intimidated. Any advice would be greatly appreciated. Thank you
1 ANSWER
If your agreement was to make payments over time, and you have made the agreed payments, the other party has no right to change any terms. However, since you had no documentation of the agreement, it is possible that a Court will believe the lender if she claims the agreement was to pay the full amount on demand. Without knowing the amount you owe, or any other terms of the loan or the circumstances surrounding it, however, I think it unlikely that the lender will sue you, as she has little to gain. You are already paying her, even if slowly, and probably can't afford any more. Getting a jugment against you might speed up the process for her, but only if you had assets from which the debt coudl be paid, so it is not certain. What is certain is that it would cost her time and money for her to obtain a judgment. Moreover, while you can't be 100% certain that you would win, she (if the facts are as you represent them) would have to lie to the Court in order to win, which means that she would face the risk of going to jail for perjury.
Unfortunately, it's a fact of life that people can always threaten to lie about you and cause you trouble. Usually, it comes to nothing.
Answered on Jul 02nd, 2013 at 12:42 PM