Often, helping a friend or a family member financially either in a form of lending a sum of money can be stressful even with a formalised arrangement (signed agreement) between the parties. Most people take ‘lending money’ lightly; that even if the sum is not repaid but there is a SIGNED AGREEMENT therefore they are PROTECTED.
“May I borrow some money?”
Person A borrows Person B sum amount of money and both of them signed an agreement stating that the “repayment will be made within 5 years from the date of the loan”. Person B fails to repay even a single cent amount and 15 years have lapsed since the date of the agreement. Person A does not bring an action and assumes that he can still claim for the owed amount at a later date as there is an Agreement between them.
It is advisable to take steps to collect the sum of money owed or take action, before the expiration of the agreement (in this case 5 years). Failure to re-collect the borrowed amount after the expiry of 6 years from the date the debtor failed to pay (in accordance with the terms of the agreement), may result in the lender not being able to recover the money at all.
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