You loaned money to someone: a friend, a family member, a former colleague, a small-business owner you wanted to help. They promised to pay you back. They haven’t. Maybe you have a written promissory note, maybe you have texts and a Venmo trail, maybe you have nothing in writing at all. The relationship has soured, or it ended a long time ago. The debt is just sitting there, and it is bothering you.
You may also be embarrassed. Most people in this spot are. You lent in good faith, you assumed the borrower would honor the obligation, and now you are wondering whether you should have known better. That embarrassment is the single most common reason people never go after what they are owed.
We handle these matters. Our collections practice is largely commercial, but we also represent individuals chasing personal loans. The legal tools are similar; the questions are different. This page deals with the questions that come up in this specific situation.
Yes: We Help Individuals Pursue Personal Loans
People often assume a collections law firm only handles big commercial matters. That isn’t true. We regularly represent individuals pursuing money loaned to a friend, family member, or business associate.
To evaluate your matter, here is what we need:
- A summary of the loan: when it was made, how much, and the terms (interest, repayment schedule, due date)
- Any written documentation: a promissory note, a written loan agreement, an email or text confirming the loan
- Proof of the transfer: bank records, Zelle records, Venmo or CashApp records, a cancelled check, or other evidence that the money moved from you to the borrower
- A history of repayment: any payments the borrower made, when, and how much
- A history of communications: texts, emails, voicemails about the loan and about repayment
We will tell you candidly whether you have a viable claim, what pursuing it would realistically cost, and what you could realistically recover. If we think the matter isn’t worth pursuing, we’ll say so. That is part of how we practice.
Do I Have a Case If I Don’t Have a Written Loan Agreement?
This is usually the first question individuals ask, and the answer is: maybe, and more often than you would expect.
Texas law does not require a written contract for a loan to be enforceable. Loans can be made by oral agreement, by an exchange of texts or emails, or by a mix of conduct and communication. On an unwritten loan, the causes of action available to a creditor include:
- Breach of oral contract. If the loan was made under an agreement that the borrower would repay, that is a contract, even if nothing was written down. Texas allows breach-of-oral-contract claims, with a four-year statute of limitations under Texas Civil Practice & Remedies Code § 16.051 in most cases.
- Money had and received. A common-law claim that lets a creditor recover money the defendant received and that, in equity and good conscience, the defendant ought to return.
- Unjust enrichment. A related equitable claim where the defendant has been enriched at the plaintiff’s expense in circumstances that make keeping the benefit unjust.
These claims are supported by anything that shows two things: that the money moved from you to the borrower, and that the borrower understood it was a loan rather than a gift. Evidence we have used in similar matters includes:
- Bank records, wire records, Zelle, Venmo, CashApp records showing the transfer
- Text messages where the borrower acknowledges the loan or promises to repay
- Emails referencing the loan, the amount, or the repayment expectation
- Voicemails the borrower left acknowledging the debt
- Witnesses who heard the borrower acknowledge the obligation
- Partial payments the borrower made, often the strongest evidence, because a partial payment is hard to characterize as anything other than acknowledgment of the debt
We have prevailed on unwritten-loan claims using combinations of this kind of evidence. What we need to evaluate is whether your specific evidence is enough to make the claim economic to pursue.
What Does It Cost to Sue Someone for a Personal Loan?
This is the second question everyone asks. Personal lenders are cost-sensitive, and reasonably so: nobody wants a legal bill that exceeds the recovery. Here is the honest framework.
Demand letter. We typically start with a demand letter. It is inexpensive and resolves roughly 15% to 20% of matters without any further work. Some borrowers, once they realize an actual lawyer is involved, decide to pay or arrange payment.
Filing suit. If demand doesn’t resolve it, we file suit. The cost depends on the court (justice court vs. county or district court), the size of the claim, and what the borrower does in response. A default judgment, where the borrower doesn’t answer, is the cheapest path to a judgment and is often the most likely outcome on personal-loan cases where the borrower is avoiding the matter.
Litigation if contested. If the borrower answers and contests the case, the cost goes up. At that point we evaluate whether the matter still makes economic sense. Sometimes the answer is yes, especially where the borrower’s defense is weak and a motion for summary judgment is likely to dispose of it. Sometimes the answer is no, and we have that conversation honestly.
Post-judgment enforcement. Once you have a judgment, the cost of post-judgment work depends on the borrower’s profile. If the borrower has identifiable assets (a bank account, real property, a vehicle, a business interest), enforcement is straightforward. Texas exempts wages from garnishment for this kind of debt, so a paycheck by itself is not directly reachable, though money sitting in a bank account is. If the borrower has nothing, we preserve the judgment for future enforcement when the borrower’s circumstances change.
Attorney’s fees recovery. This is worth knowing: under Texas Civil Practice & Remedies Code Chapter 38, attorney’s fees are recoverable on certain claims, including breach of an oral or written contract for goods, services, or money loaned. So if you prevail, the borrower is potentially on the hook for your attorney’s fees on top of the principal and interest. That materially changes the cost-benefit math on personal-loan cases.
The Borrower Keeps Saying They’ll Pay: Should I Keep Waiting?
The most common pattern in these cases is the borrower’s repeated promise to pay “soon,” “next month,” “when this deal closes,” “when I get my tax refund,” “when my situation improves.” The lender keeps waiting. Months turn into years. The debt keeps aging.
Continued waiting has real costs:
Statute of limitations. The Texas limitations period on breach of an oral contract is generally four years. The clock usually starts when the debt is due, or when the creditor demands payment, depending on the loan terms. A loan made several years ago, with no formal demand, may be approaching or past that period, and once it runs, the legal claim is barred. There are tolling and revival doctrines, but they aren’t something you can count on.
Borrower’s deteriorating situation. Borrowers who aren’t paying you usually aren’t paying others either. Their finances tend to get worse, not better. The longer you wait, the more likely the borrower dissipates assets, files bankruptcy, or simply has nothing recoverable left by the time you act.
Evidence decay. Memories fade, texts get deleted, witnesses become unreachable. Documentation that was easy to produce two years ago can be hard to assemble four years later.
The relationship is already gone. If you are still hoping to save the relationship, the hard truth is usually that it was lost the moment the borrower stopped paying. Pursuing the debt is rarely what destroys the relationship; the failure to repay already did.
Our experience is consistent: lenders who wait usually wish they hadn’t. Lenders who act promptly recover meaningfully more often than those who delay.
Small Claims Court vs. Hiring a Lawyer
Texas justice courts (sometimes still called “small claims” courts) hear claims up to $20,000. For loans within that limit, you have a practical choice: file pro se in justice court, or hire a lawyer.
Filing pro se in justice court. Justice court procedure is simplified. You can file a petition without a lawyer, serve the defendant, and try the case to the judge. Filing fees are modest and the case can move relatively quickly. For a clear-cut loan with documented evidence and a borrower unlikely to mount a sophisticated defense, this can be a sensible path.
The catch with justice court. Winning a judgment is one thing; collecting on it is another. Justice court judgments are enforceable using the same Texas post-judgment tools (abstracts, writs of execution, writs of garnishment, turnover orders) but using those tools generally takes the same legal work whether the judgment came from justice court or district court. A pro se lender who wins in justice court often calls a lawyer at that point, and we regularly take those matters at the post-judgment phase.
Hiring a lawyer for the whole matter. Hiring counsel from the start costs more upfront but gives you a fully prosecuted matter (demand letter, filing, judgment, and full post-judgment enforcement) with your own involvement kept to a minimum. Where the borrower is likely to contest, where the facts are complex, where the loan is at the upper end of the small-claims limit, or where you simply value the time saved, hiring counsel is often the right call.
We have clients who came to us after winning in justice court and finding they couldn’t collect, and clients who hired us from the start. Both paths can be reasonable. We give candid advice on which is right for your matter.
I Already Won in Small Claims: Now What?
If you already obtained a judgment pro se in justice or small claims court and the borrower hasn’t paid, we can take over the matter for post-judgment enforcement. This is a regular part of our practice.
Here is what we do:
- Review the judgment to confirm it is valid and enforceable
- Record an abstract of judgment in counties where the borrower owns or may own real property
- Conduct post-judgment written discovery to identify the borrower’s assets
- Garnish any identifiable bank accounts
- Issue writs of execution against non-exempt personal property
- Pursue turnover orders for assets not reachable by ordinary execution
- Use contempt where the borrower refuses to comply
For personal-loan judgments in the $5,000 to $50,000 range, which is the most common range we see, recovery is achievable when the borrower has assets. When the borrower has no current assets, we preserve the judgment through abstracting and renewal so future assets stay reachable. A Texas judgment is good for ten years and renewable.
What If the Borrower Files Bankruptcy?
If the borrower files bankruptcy, you will get a notice from the bankruptcy court. That notice matters: it triggers an immediate stay on collection activity, and it sets a deadline for filing a proof of claim if you want to share in any distribution from the bankruptcy estate.
Here is what you should know:
The automatic stay halts collection immediately. Once the bankruptcy is filed, you cannot keep collecting: no calls, no demand letters, no suit, no enforcement of any judgment. Violating the stay can produce sanctions against you.
Proof of claim. To share in any distribution from the bankruptcy estate, you have to file a proof of claim by the deadline in the notice. It is a relatively short form, but it has to be filed correctly and on time.
Some debts are non-dischargeable. Under 11 U.S.C. § 523, certain debts cannot be discharged, including debts incurred by fraud or false pretenses, fiduciary defalcation, and willful and malicious injury. A personal loan the borrower obtained by misrepresentation, or converted to personal use after promising to use it for a specific purpose, may not be dischargeable. To preserve a non-dischargeability claim, you typically have to file an adversary proceeding within 60 days of the meeting of creditors.
Coordination with bankruptcy counsel. We coordinate with bankruptcy counsel on proof-of-claim filing, dischargeability analysis, and continued state-court enforcement against any non-bankrupt co-obligors or guarantors.
We do not act as bankruptcy counsel, but we regularly assess whether a personal-loan claim has dischargeability issues worth retaining bankruptcy counsel to pursue. If you have received a bankruptcy notice on a personal loan, we can help you decide what to do next.
Decide What You Want to Do
If you loaned money and haven’t been repaid, the longer the matter sits, the harder collection gets. The first step is an honest look at what you have and what is realistic to pursue.
Contact us. Bring whatever documentation you have. We will tell you candidly what your options are and whether pursuing the matter is worth your time and money.
Contact us to get started or call 214-368-4686.
Related Pages
- Our Debt Collection System
- Collecting Judgments in Texas
- I Already Have a Judgment
- When the Debtor Files Bankruptcy After Judgment
- How Long Does a Texas Judgment Last?
- Getting Started
- Texas Collections Law FAQs
Personal Loan FAQs
Is a text message a contract?
A text message can be evidence of a contract. Whether it forms one depends on what it says: whether it shows the borrower agreed to repay an identified amount on identified terms in exchange for the loan. A text exchange that includes the amount and the borrower's promise to repay is often enough evidence of a contract under Texas law. We review text exchanges as a regular part of intake.
What if the loan was made years ago and I've never demanded repayment?
The statute of limitations is the threshold issue. For oral contracts in Texas, the period is generally four years. When it started running depends on the loan's terms, generally when payment was due. For a loan with no fixed due date, Texas courts often treat the clock as starting when the loan was made, since you could have demanded repayment at any time, so don't assume an old undocumented loan is still timely. We evaluate limitations as part of intake.
What if the borrower says it was a gift, not a loan?
The borrower's after-the-fact label isn't controlling. The question is what the parties actually agreed when the money changed hands. Evidence that it was a loan rather than a gift includes any communication about repayment terms, any partial payment, any acknowledgment that the money was owed, and the surrounding circumstances. We have prevailed in cases where the borrower contested loan-vs-gift characterization.
Can I get interest on the loan?
If the loan agreement specified an interest rate, the borrower owes interest at that rate (subject to Texas usury limits). If it did not specify a rate, the Texas Finance Code provides a statutory rate that may apply. Once a judgment is obtained, post-judgment interest accrues at the statutory rate set by Texas Finance Code Chapter 304.
What if the borrower has very limited income?
Texas has notably generous protections for individual debtors, including significant property exemptions and a broad exemption of wages from garnishment. A borrower with no non-exempt assets and limited income may not be readily collectible. That said, people's circumstances change. Judgments can be preserved for ten years and renewed. We evaluate collectability honestly at intake.
What if the borrower has moved out of Texas?
A Texas judgment can be registered in another state under that state's enacted version of the Uniform Enforcement of Foreign Judgments Act. We coordinate with counsel in the other state to register and enforce the judgment.
How much do I need to be owed before this is worth pursuing?
There is no fixed threshold. We evaluate each matter on its specific facts. For very small balances, the cost of legal pursuit may exceed the realistic recovery. For mid-size balances, attorney's fees recovery under Chapter 38 often makes pursuit economic where it otherwise wouldn't be. We tell clients candidly when a matter is and isn't worth pursuing.
Will pursuing this destroy the relationship with my friend / family member?
The relationship is usually already damaged by the failure to repay. Our experience is that pursuing what you are owed rarely destroys a relationship the unpaid debt hasn't already strained. The discomfort of pursuit is usually less than the discomfort of the unresolved debt sitting between you.
Do I have to come to Dallas?
Generally no. Most client communication is by phone, email, and video. We arrange in-person meetings when they're useful, but they aren't required. Hearings and depositions may not need your presence, depending on the matter.
What if I'm not sure if I want to pursue this?
That is a normal place to start. We offer an initial consultation to evaluate the matter and give you the information you need to decide, with no obligation. Many people in this situation just want to know what their options are, and we are comfortable having that conversation honestly.