Lending money to friends & family

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  • jennyjb_2
    jennyjb_2 Posts: 14 Forumite
    My Mum has offered to pay my debt off if she takes out a personal loan. I cannot believe how lucky I am, but I need a legal document showing that I owe my Mum this money and if anything goes wrong I still owe her this money, if that makes sense?

    Is there anything I can get drawn up by a solicitor or the likes?

    Your help is much appreciated

    Jenny
  • harryhound
    harryhound Posts: 2,662 Forumite
    edited 24 July 2010 at 1:45AM
    If you have a cheque book, jut write her an undated cheque.
    She can sue you for the money at any time then, if your private family agreement falls apart and the cheque bounces.
  • harryhound
    harryhound Posts: 2,662 Forumite
    LYT wrote: »
    Interesting post. My grand-parents have agreed to lend my husband and I £25000 to put down as a deposit for a new property; we will carry on living in our home and move the new place in a couple of years when our daughter goes to school. If between now and then we got a couple of friends to live in the place and pay us the money to refund my grand-parents, would that be legal? Would we need to declare it to HMRC or as it is paying the loan back it is not considered as being an income? Also, will my friends be ok living there "free"?
    Thanks a lot!

    It would appear to me (and HMRC) that you are buying a second home and renting it out?
    As long as the rent does no more than cover the interest cost of the mortgage/loan used to buy it then you have no profit.
    However if you can afford to repay the capital (principal) from the rent you are making a profit and that is taxable.

    Within a family you might manage to get HMRC to believe that its love not money that inspires you to give each other gifts (signing a deed helps too) but once a third party gets in on the act then it looks like business.
  • hi.............
  • hi.............
    V.Nice.
  • Unless you have proof of lending the money to him through documents your unlikely to get it back if you just transferred it through the likes of E-banking. You shouldn't trust anyone there's my advice.
  • 4 year ago i gave a friend of mine £20,000 to invest for me on some properties he was buying. at the time he was having 7 built and buying 1. i have since found out i only have my name on the 1 he bought and that is with 3 other people, i think it was about £5,500 i gavehinm for this 1 we also remorgaged this and i was told the money we took out of it was going into 1 of the new builds. he now says he is not sure what houses my money is in and because my boyfriend is a business partner of his and they have quite a few houses together he is now saying he thought i was lending my boyfriend the money which he knows i wouldnt have done that. i gave him £6000 cash and the rest in cheques. all the cheques were made out to him. is it worth me seeing a solicitor would i be able to get my money back or force him to at least put my name on something? thankyou.
  • Over the years I have loaned a "friend" of mine small amounts of money here and there. Last year I loaned her £200.00 but I stressed that I needed her to repay the money to me. She knew I was expecting my first baby and me and my partner needed every penny. She assured me that she'd pay me back within a week. Well a year has passed and nothing. She's ignored my calls and I've been told she's in the process of moving home (we live in different cities so its not like I can just pop round and demand my money back). She has admitted on email that she owes me the money and at first promised to pay me back, however today she has emailed to say she'll pay me back "when she can"!!

    I know its a small amount of money but over the years I have "loaned" her £50.00 here or £20.00 there and never been paid back and I haven't ever made a big deal about it but as a friend I thought she'd repsect my financial circumstances and pay me back the £200.00 I said I couldn't afford not to get back.

    Loaning her this money has caused arguments between me and my partner because he told me not to lend her any more money and because I went behind his back and loaned it anyway he was understandably upset.

    I assume I have no option but to write this money off but I can't believe any so called friend would do this!! I guess I just needed to rant rather than get any advice really as I know there is no way to recover the money and I have read on here aboutn much larger sums being loaned and not being recovered. I guess things like this show you who your real friends are
  • MFWannabe
    MFWannabe Posts: 1,999
    First Anniversary First Post Name Dropper Combo Breaker
    Forumite
    Over the years I have loaned a "friend" of mine small amounts of money here and there. Last year I loaned her £200.00 but I stressed that I needed her to repay the money to me. She knew I was expecting my first baby and me and my partner needed every penny. She assured me that she'd pay me back within a week. Well a year has passed and nothing. She's ignored my calls and I've been told she's in the process of moving home (we live in different cities so its not like I can just pop round and demand my money back). She has admitted on email that she owes me the money and at first promised to pay me back, however today she has emailed to say she'll pay me back "when she can"!!

    I know its a small amount of money but over the years I have "loaned" her £50.00 here or £20.00 there and never been paid back and I haven't ever made a big deal about it but as a friend I thought she'd repsect my financial circumstances and pay me back the £200.00 I said I couldn't afford not to get back.

    Loaning her this money has caused arguments between me and my partner because he told me not to lend her any more money and because I went behind his back and loaned it anyway he was understandably upset.

    I assume I have no option but to write this money off but I can't believe any so called friend would do this!! I guess I just needed to rant rather than get any advice really as I know there is no way to recover the money and I have read on here aboutn much larger sums being loaned and not being recovered. I guess things like this show you who your real friends are

    Please remember this if she ever asks to borrow any money again; even if it's a pound!! Did you really expect it to be paid back when she has never paid anything back? Sorry if i'm pointing out the obvious but you learn the hard way; never lend money to friends or family. Right it off as a bad mistake; one which you won't repeat again. good luck with your future.
    28/12/23: Debt total £12,700/13,192.13
  • I have lent money to a boyfriend around February 2010. We have since split and he is now refusing to pay the money back.

    The money was paid direct to a debt company (evidence I have on my internet bank statement) however i did not take any other details at the time. I had received a call explaining that the mother of his children had got into debt and had bailiffs knocking at her door. I wanted to send the money to his account but was told it took too long and he therefore liaised with the debt company informing them i would be clearing the outstanding balance.

    We have since broken up and he has paid me a small amount of the debt and is now refusing to pay back the rest. There have been various texts stating that 'he had transferred the money' or 'Ill have it on Thursday' (though none of which stated the exact amount) and nothing has come through anyway, he has most recently said that I will not receive anything from him.

    Could you please advise on this situation. He is in a stable financial position with a full time job and a mortgage. This is not the first time he has not repaid a debt I lent him £500 back in 2009 however I am not sure that I am able to claim for this as it was a while ago.

    .... I know more fool me for lending him it twice!
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