As an attorney in Florida, I often encounter clients who have lent money to friends, family, or business associates only to find themselves in a bind when the loan isn’t repaid. Understanding your legal rights and options in such situations is crucial. Here’s a comprehensive look at what you can do if you find yourself in this situation.

The Basics of Lending Money:

– Written Agreement: Ideally, any loan should be documented with a written agreement that specifies the amount loaned, repayment terms, interest if any, and signatures of both parties. Without this, proving the loan can be more challenging.

– **Interest Rates:** In Florida, if you charge interest, you must adhere to the state’s usury laws which cap interest rates at certain levels depending on the type of lender you are (individual vs. licensed lender).

Your Rights When Repayment Fails:

1. Demand Letter:

   -Send a formal demand letter to the borrower requesting repayment. This letter should detail the amount owed, terms of the original agreement, and give a deadline for repayment. This step can sometimes prompt repayment without further legal action.

2. Small Claims Court:

   -Legal Action: If the amount is within the jurisdiction of Florida’s small claims court (currently up to $8,000), this can be an effective, less costly option. You’ll need to file a claim, and both parties will have a chance to present their case in court.

3. Civil Court for Larger Amounts:

   -When to Escalate: For loans exceeding small claims limits, you might need to file in county or circuit court, which involves more formal legal proceedings, potentially requiring legal representation.

4. Judgment and Collection:

   – Even with a court judgment, collecting the money can be tricky. Options include wage garnishment, bank account levy, or property liens, but each has its own legal steps and limitations.

5. Statute of Limitations:

   – In Florida, the statute of limitations for most debt collection actions is generally five years from the date of default. Acting within this timeframe is crucial.

Important Considerations:

-Promissory Notes: If you have a promissory note, this can serve as evidence in court. Ensure it’s detailed and notarized for added validity.

-Personal Relationships: Lending to friends or family can complicate personal relationships. Consider if the potential legal battle is worth the strain it might put on these bonds.

– Professional Advice: Always consider consulting with an attorney before proceeding with any legal action. This ensures you’re taking the most effective route tailored to your specific situation.

Lending money without a formal agreement can lead to significant headaches, but Florida law provides mechanisms to protect lenders. If you find yourself in a situation where you’ve lent money and aren’t being repaid, take action promptly. Remember, the key to successful recovery of loaned funds often lies in the initial documentation and the willingness to escalate to legal measures if necessary. 

For personalized advice or assistance with a specific case, please contact our law firm. We’re here to help navigate these often complex financial and legal waters.

Malcolm A. Purow

Managing Attorney