Well, the fact that you have not signed anything is bad for the other guy, but you can't lie in court and if you owe this money and they take you to small claims court you'll have to tell the judge the situation and my guess is they will make you pay the agreed amount back. Plus they won't be as flexible as the other investor will be as far as payment plans and such, so it would probably be better if you work out something to pay it back before you go to small claims court.

Good advice, Jodi. There is also the moral aspect of this situation. When you borrow money, there is an implied contract - even if it is only verbal. But there is the bigger contract - the one with yourself! You made a promise to pay the money back --- your word is the only thing you own that you have complete control over. It's important to keep your word.

Try to offer a settlement that is fair to the person you borrowed from, but manageable for you SO THAT YOU CAN KEEP YOUR WORD TO THEM!