- September 12, 2023
- Posted by: legaleseblogger
- Category: Related News
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Title: The Situation with My Friend’s Loan and the Role of AI Legalese Decoder
Introduction:
Running an Amazon storefront has been my full-time job for the past three years. Recently, my friend loaned me $20k on his credit cards to purchase additional inventory in the hopes of working with or for me in the long term. Unfortunately, we failed to establish any clear terms or agreements, leading to a sticky situation. This article delves into the challenges I face, the possibility of seeking legal guidance, and how AI Legalese Decoder can assist in this scenario.
The Absence of Clear Terms:
Regrettably, my friend and I neglected to discuss or sign any agreements regarding the loan. This oversight significantly complicates matters as it leaves room for confusion and misinterpretation. To avoid such predicaments, it is crucial to establish terms, payment schedules, repayment amounts, and the expectations of both parties involved. This is where AI Legalese Decoder can prove invaluable.
The Role of AI Legalese Decoder:
AI Legalese Decoder is a powerful tool that can assist in situations like this. Its ability to interpret complex legal jargon and provide simplified explanations can help parties understand their rights and obligations. By utilizing this tool, I could ensure both my friend and I have a comprehensive understanding of the loan terms, avoiding misunderstandings and potential disputes.
Navigating Payment Adjustments:
As I have been making bi-weekly payments to my friend, the recent decline in my sales has necessitated a temporary reduction in payment amount. I have valid reasons, such as an increase in lease costs, quarterly employee tax obligations, and hiring additional help for the upcoming Q4 season. However, this decision has ruffled feathers, particularly with my friend’s dad, who now wants me to make payments directly to him via Venmo.
The Involvement of My Friend’s Dad:
My friend’s dad, who plays a significant role in his life, is concerned about his son’s financial stability. Unfortunately, due to his lack of understanding about e-commerce as a lucrative full-time job and my friend’s poor communication skills, the situation has become frustrating. His dad’s demand for direct payments and insistence on a meeting to “sort things out” adds a layer of complexity to the issue.
Addressing the Concerns and Seeking Legal Advice:
Given the lack of established terms and the involvement of my friend’s dad, it may be wise to consider seeking legal advice. Consulting with a lawyer can help evaluate the situation and determine the potential legal implications. They can provide professional guidance on how to handle the demands and protect my business interests. AI Legalese Decoder can also be useful during this process, aiding in the understanding and interpretation of legal terminology and requirements.
Conclusion:
In summary, the absence of clear terms in my friend’s loan has led to a complicated situation involving his dad’s involvement and demands. Seeking legal counsel and utilizing AI Legalese Decoder can be instrumental in finding a resolution and safeguarding my business interests. By understanding the legal implications and leveraging AI technology, I can navigate this situation more effectively and ensure a fair resolution for all parties involved.
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AI Legalese Decoder: Understanding Complex Legal Language Made Easy
Introduction:
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****** just grabbed a
You’re not required to pay dad. You’re not required to meet with dad.
You need to sit down with your buddy and hammer out a written repayment plan, to include reasonable interest.
Because what you’re doing now is no way to run a business.
How much have you paid back total? And IÔÇÖm sure dad is worried because his son is getting taken HARD in interest fees monthly for that card debt.
LetÔÇÖs be real, resale has tight margins. If you had to take a loan from this guy on cc, itÔÇÖs not as lucrative as you say. You asked somebody to take on 25%+ interest to resell products, thatÔÇÖs just crazy to me.
So to be clear, you’re both morons and he’s a bigger moron so you took advantage of him. Give him back the money or go to court. The thing about not having an arrangement is it doesn’t default to terms that benefit you just because youre the one paying. So hammer it out – you should he paying him back WITH interest or go to court and find out you owe a lump sum.
idk man you definitely took advantage of this guy. this guy loaned you 20k on his own credit cards without any sort of payment plan? what the fuck?
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dad is rightfully upset because his kid got scammed. theres no way you are paying the friend >>credit card interest to make this worthwhile for him or even just a net-even.
It’s not clear what your arrangement is here. Here are some possibilities:
(1) He bought a bunch of inventory that you’re now selling for him, and you’re paying him back as that happens — eventually, you expect that there will be enough sales from that inventory for him to pay back the credit cards (plus interest) and make a tidy profit. But, if you can’t sell that inventory, it’s on him.
(2) He bought a bunch of inventory as basically a “buy in” to the company and you’re paying him as the company makes money, and you expect to continue to pay him forever.
(3) He basically borrowed a bunch of money for you, and your plan is to pay him back that money, plus the interest he pays, plus something for his agreeing to float you the money.
Which of those is it?
How much do you have left to pay? How much interest are you paying?
2k every 2week for 4 months = 8 payments totalling 16k
2k every month for 2 months =2 payments totalling 4k
Total paid = 16+4 =20k. Which does not take into account the upper end of the range or interest.
You will end up hiring a lawyer when/if your friend’s dad hires a lawyer. At which point there will be depositions taken to establish how much you owe and to establish a repayment schedule.
It is not a question of your business being hard to understand, it is that you borrowed money and your friend has not yet pushed to get it back.
You might be able to get away with claiming that there is no money owed, but I would not count on it. At the very least, your friend has credit card statements that reflect the $20,000.
Give your friend an accounting of how much you’ve actually paid him, not this 2k plus or minus per month shit. Then give him a schedule of future payments and an end date of when it’ll be paid off. Factor in the interest he’s accruing and how much of the profit will be if there is any left over for him with the interest. Then, NEVER do that shit again. You are no friend to him letting him leverage himself that far into debt on credit cards in this shit ass economy, which you’ve for sure known about for the last 12 months or longer. Have him go take some CC business classes. To get him out of his Dad’s hair and work on helping him become an asset that will be better for both of you. Personally, I’d want nothing to do with you after this, but you two are “friends”.
Set up a payment plan instead of taking advantage of your “friend” next time
OP:
I just looked up the current going rate: Cash advance APRs can be as high as 36%, with a current average of 24.44%.he absolute lowest going rate is 18% (variable). This does not include any late payments fees, or, God forbid, a default rate. I have a strong suspicion that this “friend” with such poor business decisions has not shopped around. So lets assume he is paying 25% on this cash advance loan. That is $5000 in interest per year.
So, OP, are you paying this friend interest? If not you are absolute taking advantage of your “friend.” In the worst way. Awful. You are expecting this friend to lose thousands of dollars to provide you with cash flow.
If you are paying interest, you should be 100% focused on paying this off instead of “I would like to have a cushion in case I need additional funds.” Pay it off. Get a revolving line of credit loan if you need it later, as the money is needed. (If you cannot get a loan, then you have no business borrowing from a friend.)
“The payment amount varies based on sales…need to lower the amount for the next few months, due to my lease increasing, quarterly employee tax time, and hiring additional help for Q4” This is not how loans work. It should be a bill, non-negotiable just like any other bill.
Now, as for Dad: I assume that he recognized the death spiral of interest you have put his son in, has purchased that debt to end the interest accruing, and now expects to collect directly. As you said, you have no contract, so you do not really have to agree to anything. But getting this paid off quickly is simply the right thing to do. Pay it to the friend or pay it to the dad, whatever makes you comfortable. But do create terms and do make this a priority.
Not a lawyer.
Dad is hassling you because you took a lot of money from his son, and like you said, no terms, recourse. Nothing.
Pay back your friend if he’s actually your friend. Otherwise, he’s just an acquaintance you took advantage of.
Edit:
Also, could have got it from dad or it’s dad’s monesuspicious.
You entered into a business deal with the guy, then took advantage. Not a good look to future or current business partners, investors. Bad practices.
Illegal, no. Shady af, yes. Coming here to make a reddit post to protect yourself after doing harm is a bit sus.
Yeah, this is a situation you wont win. Ignoring the potentially predatory nature of this loan (likely tanking his credit), I would suggest paying him back quickly. The theory of partial performance defeats any defense you may have had.
Anyways, Credit card interest is a monster. Get it off your books under your control before a judgment does that for you. Going forward, standard loans or lines of credit are going to be much affordable.
Probably because his son was dumb for lending you the money and heÔÇÖs panicking. And doesnÔÇÖt sound like you guys on a plan for you to repay him. Repaying him as it makes sense for you probably isnÔÇÖt ideal for them. HeÔÇÖs probably more up and arms with his son making a bad move
What kind of way is this to run a business?
You take a loan off a friend’s credit card? Do you keep any books at all? Do you plan anything? Or is this just kinda free-wheeling “I hustle when I see a potential deal”?
Please tell me you’re not involved in an MLM.
How much do you owe left? Do you know, or are you just relying on your friend to say when heÔÇÖs got enough back? It sounds like the dad is concerned his son got scammed, or more realistically, your friend gave you a 20k loan with his credit card that he had with his dad. Unless he just has tons of credit available, 20k will be killing his utilization rate, which will probably be killing his credit score. The best way for this to turn out going forward would be to sit down with your friend, and figure out an amount that needs to be repaid, and for you to go get your own loan, and pay him back.
So putting aside there were a lot of mistakes on both your side and his moving forward. The first thing this is between you and the friend the dad isn’t involved. The next thing you need to do is get a full account of what you owe vs what you paid. I would then come to a term’s agreement with him about what you will pay to the loan/ if he will come work in your business with equity.
I love this thread. OP clearly takes advantage of his “friend” by making him take a ridiculously high interest loan out for him, doesn’t sign any sort of paperwork tying him to the loan, and is now mad that his manchild friend’s dad is coming in and trying to financially unfuck his son. Everyone calls him out on the thread he created for advice, and now he’s not responding to any comments.
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To OP:
Legally, you’re perfectly safe. You put nothing in writing and have no obligation to talk to your friend’s dad, or your friend, for that matter. In the eyes of the law your friend took out a $20k loan and decided to give you the money.
Ethically, you’re kind of a piece of shit. I find it very interesting that you failed to mention the remaining balance on the loan AND the set timetable for when you were going to pay this back. You wouldn’t happen to be covering your friend’s interest payments would you?
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TLDR: You’re friend is a gullible idiot, you’re clearly taking advantage of him, and have no right to be mad at friend’s dad (who’s probably tired of his son’s antics) chasing you down for the money you talked him out of. Pay your friend back, with interest, and don’t take advantage of people like this.
If you are paying him back then it is a loan and not an investment. This, once he is paid back you do t owe him anything and worse for him, heÔÇÖs the one paying interest on the loan.
OP and friend went about this in the worst way. I understand why the dad would be upset. Next time take a business loan if you need the capital for inventory. Ultimately OP should be paying their friend back the same amount as itÔÇÖs been. If OP is losing money then it should be losing from their end, not paying the friend back less. OP you sound like a complete sleaze. The mindset that you donÔÇÖt need to payback as much because itÔÇÖs your friends fault for not hammering out details really shows who you are. You shouldnÔÇÖt be involving anyone else in your remedial business tact.
OP if this goes to court you’re not going to just be liable for the base amount. There is a very high chance you will be liable for some form of interest. The court is not going to side with you and require zero interest on the loan.
I Checked out after the no contracts or anything signed ƒñªÔÇìÔÖé´©Å
I have friends but IÔÇÖll be dammed if I lend someone 20k without some kind of agreement or contract signed
Don’t respond to dad. He has no part of this business deal and is trying to insert him with something he doesn’t belong.
Get something in writing established with your friend.
Personally, I wouldn’t be interested in going into a business venture with someone who funds the initial investment via credit card.
Sounds like you took advantage of your ÔÇ£friendÔÇØ from our perspective particularly you left out the balance and loan terms.
Anyways, you do not have to repay anything but if you do not want to burn bridges and lose a friend, talk directly to your friend and handle the repayment plan.
Your friend’s dad has absolutely nothing to do with the situation between you and your friend. He can’t change the terms of the loan and he has no grounds to sue (assuming he’s not your friend’s legal guardian or anything).
I would politely inform your friend that you’re not communicating about this issue with his father anymore.
As someone who did almost exactly this in the same business.
I would go back and see how much was given back for that rough average of 2-4k/mo for the last 6 months.
Send friend the receipts –
You leant 20k, I’ve repaid you 12k-24k (actually number) in the last 6 months. Based on a 20% apr, over the course of a year – it’d be topping off at 22k to 23k with accrued interest. If you paid 24k don’t even stress it – bc technically you’re paid up.
Then it’d be breaking down ROI and what this working relationship would even look like long term if this is how dramatic it became right off rip.
Give a payment schedule you can stick to and a total pay remaining. Even if you low ball the amount per month and then over deliever on payment.
Then, tell him to deal with his dad.
Bc it’d be pretty shitty if his dad is tripping like this, and really, Homie, just been squandering the money you’ve been repaying him instead of handling his business.
Then, don’t entertain anything else via text message and ignore his dad unless you feel the need to send him the screenshots of the conversation you sent your friend. Incase he’s dodging accountability on both sides of the fence.
Edit: NAL
Tell dad to take a walk, it’s none of his business.
Your friend loaning you money below market rate can be considered a gift which means nothing for you but can have tax implications for him. You need to come up with terms and a rate and it needs to be reasonable on both.
Make sure your buddy and his dad donÔÇÖt know too many details about how your biz operates. Dad might just want to set your buddy up to do his own thing.