Money

You lent them money. Now they say it was a gift

A bank transfer proves the money moved, not that it was a loan. How thirteen countries handle informal loans: who has to prove it, how long you have, and whether 'I'll pay you back' restarts the clock.

A friend needed money quickly. They said they would pay it back next month, and you had known them for years, so writing anything down felt unnecessary. You sent the transfer.

A year later you brought it up, carefully.

“About that money.” “Wait, I thought that was a gift?”

A bank transfer proves the money moved. It does not prove it was a loan.

How thirteen countries handle an informal loan

Country	Basic limitation period	Does a spoken “I’ll pay you back” restart the clock	Small claims limit
England and Wales	6 years; no repayment date runs from a written demand	No. Signed writing required	£10,000
United States (California)	2 years oral contract, 4 years written	No. Signed writing required	$12,500 (individuals)
United States (New York)	6 years	No. Signed writing required	$10,000 (NYC)
Canada (Ontario)	2 years; demand loans run from the demand	No. Signed writing required (texts accepted in some cases)	$50,000
Australia (New South Wales)	6 years	No. Signed writing required	$20,000
New Zealand	6 years	No. Writing required	$60,000 (Disputes Tribunal)
India	3 years from the date of the loan	No. Signed writing required	—
South Korea	10 years	Yes. No form required	₩30 million
Japan	5 years from knowledge (10 at most)	Yes. No writing needed	¥600,000
Spain	5 years	Yes. Any act acknowledging the debt	No cap on the payment-order procedure
Mexico (Federal Civil Code)	10 years	Yes. Spoken or written	—
Chile	5 years (ordinary action)	Yes. Express or tacit	—
Argentina	5 years	Yes. Acknowledgment by the debtor	—
Italy	10 years	Yes. Tacit acknowledgment included	—

The US, Canada and Australia set these rules state by state or province by province, so we have used representative jurisdictions. Mexican states have their own civil codes; the row reflects the federal code. Blank cells are ones we did not verify. Ireland, Germany, France and Brazil are not included because we have not researched them.

The column that splits the table is the third one. In the English-speaking jurisdictions we checked, a debtor who only says they will pay does not restart the limitation period. In the civil-law countries, they do.

The person who lent the money has to prove it was a loan

A loan does not have to be in writing to be a contract. Not having a signed agreement does not make it unenforceable.

The problem starts when the other person says it was never a loan. Courts generally put the burden on the person claiming repayment. A bank transfer is evidence that money moved, but money moves for many reasons: gifts, repayment of something else, a contribution to a shared cost, an investment.

The same principle appears in very different legal systems. South Korea’s Supreme Court holds that even where both sides agree the money was handed over, the person claiming it was a loan must prove the loan (2014Da26187, 10 July 2014). Italy’s Court of Cassation has held that handing over money is not in itself proof of a loan, and the person seeking repayment must prove the basis of the obligation to repay (order no. 5560, 1 March 2021).

What helps is evidence that “lend” and “pay back” were actually said. A message asking to borrow, a message promising to repay, interest or partial repayments.

Time runs out faster than people expect

England and Wales allow six years for a contract claim. For a loan with no fixed repayment date, section 6 of the Limitation Act 1980 starts the clock only when the lender makes a written demand for repayment.
California gives two years for breach of an oral contract (Code of Civil Procedure section 339) and four years for a written one (section 337). New York gives six years for contract claims (CPLR 213).
Ontario’s basic limitation period is two years. For a demand obligation, the clock starts on the first day the debtor fails to pay after a demand has been made (Limitations Act, 2002, section 5(3)).
New South Wales allows six years for contract claims (Limitation Act 1969, section 14), and New Zealand six years for money claims under the Limitation Act 2010.
India is the one to watch. A suit for money lent must be brought within three years from the date the loan was made, and the same applies to a loan payable on demand (Limitation Act 1963, Schedule, Articles 19 and 21). Waiting for a friend to be ready can use up the whole period.

Outside the English-speaking world the periods run from five years in Spain, Chile, Argentina and Japan to ten in South Korea, Italy and under Mexico’s federal code.

Whether “I’ll pay you back” restarts the clock

A limitation period can start again when the debtor acknowledges the debt. What differs is whether a spoken acknowledgment counts.

In England and Wales it does not. To be effective, an acknowledgment must be in writing and signed by the person making it (Limitation Act 1980, sections 29 and 30).

In the United States the rule is set by each state. California provides that no acknowledgment or promise is sufficient unless it is in a writing signed by the party to be charged (Code of Civil Procedure section 360). New York says a signed writing is the only competent evidence of a new or continuing contract that takes a claim outside the limitation period (General Obligations Law section 17-101).

Ontario requires an acknowledgment in writing, signed by the person making it (Limitations Act, 2002, section 13(10)). Ontario courts have, however, accepted text messages and emails as written acknowledgments, with the sender’s identifying details treated as a signature.

New South Wales (Limitation Act 1969, section 54) and India (Limitation Act 1963, section 18) also require a signed writing, and New Zealand requires the acknowledgment to be in writing (Limitation Act 2010, section 47).

The civil-law countries go the other way. South Korea’s Supreme Court has held that an acknowledgment needs no particular form and can be express or implied. Japan does not require an acknowledgment to be written (Civil Code article 152). Mexico’s federal code says in terms that the debtor can acknowledge the right “verbally or in writing” (article 1168(III)), and Spain, Chile, Argentina and Italy accept acknowledgment by conduct as well as words.

So in the English-speaking jurisdictions, “I’ll pay you back next month” said out loud does not buy you more time. The same sentence in a text message might.

If the amount is small

Most of these jurisdictions have a simpler route for smaller claims.

England and Wales allocate claims up to £10,000 to the small claims track, and they can be started online through Money Claim Online. California’s small claims court hears claims by individuals up to $12,500, and New York City’s up to $10,000. Ontario raised its Small Claims Court limit to $50,000 on 1 October 2025. The Small Claims Division of the Local Court of New South Wales hears claims up to $20,000, and New Zealand’s Disputes Tribunal doubled its limit to $60,000 on 24 January 2026.

What you actually need is “I’ll pay you back”

You cannot go back and get a loan agreement signed. What you can do now is create evidence that the money was a loan and that they have acknowledged owing it.

Ask in writing. “Hey, about the money I lent you, when do you think you can pay it back?” If the answer is “next month, I promise,” you have evidence that it was a loan. In the jurisdictions that accept messages as signed writing, you may also have an acknowledgment that restarts the clock.

If they only answer out loud, a recording can still help. Conversations about money tend to happen in person or on the phone, not in text. In most US states a person taking part in a conversation can record it, and so can a participant in India; California and some other states require everyone’s consent. The details are in is it legal to record a conversation you’re in? and which states are strict. Where a signed writing is required, a recording will not restart the limitation period, but it can show that the money was lent rather than given, and it tells you exactly what to put in the follow-up message.

The practical problem is that “do you mind if I record this?” is not something you say to an old friend.

TalkSafe is an Android voice recorder that starts recording when it hears a word you set in advance. Keywords are recognised whoever says them, so you can set words the other person is likely to use. It works with the screen locked and saves the 30 seconds before it started, so you do not have to interrupt the conversation.

Why the original file and the opening seconds matter once a recording is used as evidence is covered in you have the recording, you still may not be able to use it. When a spoken agreement conflicts with a written contract, see it is not in the contract, it was agreed in the meeting.

What this comes down to

A loan without a written agreement is still a loan. The person who lent the money has to prove it.
A bank transfer shows the money moved. You also need evidence that repayment was agreed.
Limitation periods vary widely: two years in Ontario, three years from the date of the loan in India, six in England and Wales.
In England and Wales, California, New York, Ontario, New South Wales, New Zealand and India, a spoken “I’ll pay you back” does not restart the clock. Get it in writing.
Ask about repayment by message, and if the conversation happens out loud, record the conversation you are part of where that is lawful.

This article is general information, not legal advice. Speak to a lawyer about your own situation.

Can I get back money I lent a friend without a written agreement?

Yes. A loan does not need to be in writing to be a binding contract. The difficulty is proof: if the other person says the money was a gift or something else, the person claiming it was a loan generally has to prove that it was. A bank transfer shows that the money moved, but not why.

How long do I have to sue for an unpaid personal loan?

It depends on where you are. In England and Wales the limit for a contract claim is six years, and for a loan with no fixed repayment date time runs from a written demand for repayment under section 6 of the Limitation Act 1980. In California an oral contract claim must be brought within two years, and a written one within four. New York allows six years for contract claims. Ontario's basic limitation period is two years, New South Wales and New Zealand allow six years, and in India a claim for money lent must be brought within three years from the date the loan was made.

If they say 'I'll pay you back' does the limitation period restart?

In the English-speaking jurisdictions covered here, not if they only say it. England and Wales require an acknowledgment to be in writing and signed by the person making it under sections 29 and 30 of the Limitation Act 1980. California Code of Civil Procedure section 360, New York General Obligations Law section 17-101, Ontario's Limitations Act section 13, New South Wales Limitation Act section 54 and India's Limitation Act section 18 also require a signed writing, and New Zealand's Limitation Act 2010 section 47 requires the acknowledgment to be in writing. By contrast, South Korea, Japan, Spain, Mexico, Chile, Argentina and Italy accept an acknowledgment without written form.

Does a text message count as a written acknowledgment of a debt?

In Ontario, courts have accepted text messages and emails as acknowledgments in writing under section 13 of the Limitations Act, treating the sender's identifying information as a signature. Whether a text message satisfies the signed-writing requirement elsewhere depends on the jurisdiction's rules on electronic signatures, so it is worth getting the acknowledgment in a message you can keep either way.

What is the small claims limit for recovering a personal loan?

In England and Wales the small claims track covers claims up to £10,000. California's small claims court hears claims by individuals up to $12,500, and New York City's up to $10,000. Ontario's Small Claims Court limit rose to $50,000 on 1 October 2025, the Small Claims Division of the Local Court of New South Wales hears claims up to $20,000, and New Zealand's Disputes Tribunal hears claims up to $60,000 from 24 January 2026.

Can I record the conversation when I ask for the money back?

In most US states and in India a person taking part in a conversation can record it, while some US states such as California require everyone's consent. Even where a recording is lawful, in jurisdictions that require a signed written acknowledgment a recording of someone saying they will repay does not restart the limitation period, although it can still help show that the money was a loan rather than a gift.

How does TalkSafe help record a conversation about money?