Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • Justlookin
    • By Justlookin 20th May 17, 8:11 PM
    • 5Posts
    • 3Thanks
    Justlookin
    Borrowing from a friend
    • #1
    • 20th May 17, 8:11 PM
    Borrowing from a friend 20th May 17 at 8:11 PM
    Big problem in a few words

    Borrowed from a friend over a period of about four years. Let's say the total is 25k. Repaid money over time in instalments which come to, for sake of argument, £30k

    However, the friend claims around £10k still due as the money provided to me came from credit cards and loans some of which were high interest.

    I feel morally wrong stopping payments but also find it hard to keep going when I have in essence repaid the money advanced to me (and then some)

    Is it right to say that any agreement between the banks and my friend is between them. I cannot be legally responsible for that interest and charges. Though I may be morally responsible for them.

    It's a difficult situation as they did help me but it seems I'm never going to get out of this and as another friend said 'what if they got the money from a loan shark'

    I'm prepared for the flames.
Page 2
    • Caroline_a
    • By Caroline_a 10th Jul 17, 3:33 PM
    • 3,866 Posts
    • 10,647 Thanks
    Caroline_a
    If i were you for this amount of money I would be wanting to see proof of this in spreadsheets and also details of loans taken out for your loan. If you now still owe £30k does that mean that you will have eventually paid him £60k for a £25k loan?
    • BJV
    • By BJV 10th Jul 17, 3:53 PM
    • 2,241 Posts
    • 3,359 Thanks
    BJV
    Ok if the difference was a few pounds ok I would take it on face value but another £30,000. ????? I would want to see statements. I agree that they should not end up out of pocket but equally you should not be funding their lifestyle.

    So if your "figures where right" you have borrowed 25k and will end up paying back £60K. Even credit cards would not cost that much.

    If they have done nothing wrong they will have nothing to hide and will be fine showing you.
    Happiness, Health and Wealth in that order please!
    • hawkeye9999
    • By hawkeye9999 10th Jul 17, 4:24 PM
    • 54 Posts
    • 22 Thanks
    hawkeye9999
    Update. It's not 10k it's now 30k I still owe.
    Oral agreement to repay.
    Frequently told credit had been cycled onto interest free cards.

    .
    Originally posted by Justlookin
    Is that if you pay it off today, or will they continue to have interested added.
    • Justlookin
    • By Justlookin 10th Jul 17, 6:12 PM
    • 5 Posts
    • 3 Thanks
    Justlookin
    That would be the amount today. In the past I've been advised the sum lent had been moved to low or no interest. I can't say with any certainty what the position will be in a year / five years.

    I think the reason for posting was to understand the legality. For example they couldn't insist on immediate repayment could they. Or force me into a sale of assets. Morally I feel if I'm making the payments on what is now essentially money over and above what was lent to me then I'm ok. We have no formal agreement but I'm at least paying the money.
    • TrustyOven
    • By TrustyOven 10th Jul 17, 6:58 PM
    • 606 Posts
    • 640 Thanks
    TrustyOven
    Might be time to cut them out of your friends list.

    How they financed the lending of the money to you should not concern you. It's an implementation detail on their side. They could have used their savings, or sold some valuables or worked overtime. It shouldn't matter.
    If you can prove that they lent you 25k and you paid back the full amount plus extra, then I think any more money they demand is possibly extortion and I wouldn't pay any more.

    I'm not sure what the legal view is, however. I cannot believe that a court would side with them, but I suspect there are too many fruity-loops laws out there and the court might take their side.

    You could also see about speaking to Citizens Advice Beurau? Hopefully before long, someone with a bit more legal knowledge can reply. You could also see about searching for the actual laws and see if there is anything in there on this topic.
    Goals
    Save £12k in 2017 #016 (£4212.06 / £10k) (42.12%)
    Save £12k in 2016 #041 (£4558.28 / £6k) (75.97%)
    Save £12k in 2014 #192 (£4115.62 / £5k) (82.3%)
    • DUTR
    • By DUTR 10th Jul 17, 7:01 PM
    • 10,879 Posts
    • 6,183 Thanks
    DUTR
    That would be the amount today. In the past I've been advised the sum lent had been moved to low or no interest. I can't say with any certainty what the position will be in a year / five years.

    I think the reason for posting was to understand the legality. For example they couldn't insist on immediate repayment could they. Or force me into a sale of assets. Morally I feel if I'm making the payments on what is now essentially money over and above what was lent to me then I'm ok. We have no formal agreement but I'm at least paying the money.
    Originally posted by Justlookin
    It sounds like this friend is was an ex ?
    Was the money loaned in one big lump sum?
    Both parties should be keeping a record of what was loaned and paid. The past is the past you both should draw up an agreement and then stick to it.
    • Justlookin
    • By Justlookin 10th Jul 17, 7:27 PM
    • 5 Posts
    • 3 Thanks
    Justlookin
    No not an ex. When I was struggling they kept handing me cash. I was in an IVA. Finances a state. I was telling anybody who would listen. This friend kept 'helping' and now I'm in a worse position than I was then.

    They meant well and at the time I was so relieved to have some money. But it was a bad move for both of us
    • -taff
    • By -taff 10th Jul 17, 7:43 PM
    • 7,344 Posts
    • 4,766 Thanks
    -taff
    If you have no formal agreement, and there is no proof of this debt, and you have paid off more than you originally borrowed, I'd be tempted to tell the friend take a running jump.

    Ask for proof of how this debt has escalated, and insist on statements, bank account statements etc, to see exactly what's owing.

    If they hve truly beome 60 grand out of pcoket from loaning you 25, then morally, pay it. Legally though, you don't have to pay anything.
    • societys child
    • By societys child 10th Jul 17, 7:57 PM
    • 4,548 Posts
    • 4,848 Thanks
    societys child
    Never lend money to a "friend". They will at some point screw you over. Here's the proof.

    • Justlookin
    • By Justlookin 10th Jul 17, 8:05 PM
    • 5 Posts
    • 3 Thanks
    Justlookin
    I don't think either of us are 'screwing' the other over
    • 27cool
    • By 27cool 10th Jul 17, 8:33 PM
    • 249 Posts
    • 190 Thanks
    27cool
    Well. If you don't think that you are being screwed over, then you are pretty naive. How they funded the money that lent you is their business. Not yours.
    If you knew about the extortionate interest they were paying then you were no sort of a friend to let them help you.
    If you didn't know, then they were extremely naive to let themselves get lumbered with borrowing costs of that magnitude.
    • BobQ
    • By BobQ 10th Jul 17, 10:03 PM
    • 9,699 Posts
    • 12,602 Thanks
    BobQ
    I think your friend behaved very stupidly in borrowing on a CC to give you a loan, more likely he is trying it on.

    My view is that if you knew that he was doing this there is an obligation to pay more, but not without real evidence.

    If he never told you that he was borrowing at high rates I do not think that means you are obliged to pay him more than a reasonable interest (say what he would have got if he had put the money in a savings account) which you seem to have done.

    Your friend is not authorised to loan money at commercial rates and to try to persuade you to keep paying is unfair and unenforceable.

    Just because your friend has a credit card debt trying to persuade you to pay it off is unfair.

    I would ask him for a copy of his CC statements that show he withdrew money at the time he loaned it to you and see if it approaches the sum you borrowed. If you do I suspect he will not provide it.
    Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are incapable of forming such opinions.
    • Annie35
    • By Annie35 10th Jul 17, 10:25 PM
    • 117 Posts
    • 78 Thanks
    Annie35
    sounds like loan sharking no?
    • tempus_fugit
    • By tempus_fugit 11th Jul 17, 12:15 AM
    • 194 Posts
    • 221 Thanks
    tempus_fugit
    I don't understand how the amount outstanding suddenly went from £10k to £30k, something's not right here. My feeling is that if someone lending you money wants it paid back with interest then they have to have a formal agreement detailing how much you have to pay back and when, otherwise how could anyone ever borrow any money and know how much they were going to be liable to pay back? If it's not in writing but you knew that there would be some interest to pay then I would just offer to pay the original sum plus a reasonable amount of interest. This may or may not work but it shows the reason why these things should be agreed, preferably in writing, before you start. The lack of one could go against you but it could just as easily go against the other side, hence why coming to some agreement on what has to be repaid may be an idea, as the friend would have to prove the interest being charged if it came to them taking legal action against you. Also, as regards them wanting the money now, they would have a hard time forcing you to do that if there was no indication of a timescale when the money was lent. All in all a bit of a pickle, but I wouldn't just agree to the £30k just like that.
    Retired at age 56 after having "light bulb moment" due to reading MSE and it's forums. Have been converted to the "budget to zero" concept and use YNAB for all monthly budgeting and long term goals.
    • ceecee1
    • By ceecee1 11th Jul 17, 9:15 AM
    • 376 Posts
    • 811 Thanks
    ceecee1
    Sounds like a loan shark to me - speak to the illegal money lending team

    https://www.gov.uk/report-loan-shark
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

760Posts Today

6,067Users online

Martin's Twitter
  • RT @thismorning: 'Sometimes the best gift is releasing somebody else from the obligation of having to give to you' says @MartinSLewis. Do y?

  • Shana tova umetuka - a sweet Jewish New Year to all celebrating. I won't be online the rest of t'week, as I take the time to be with family

  • Dear Steve. Please note doing a poll to ask people's opinion does not in itself imply an opinion! https://t.co/UGvWlMURxy

  • Follow Martin