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  • FIRST POST
    • Glenn Stubberfield
    • By Glenn Stubberfield 9th Sep 17, 3:51 PM
    • 9Posts
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    Glenn Stubberfield
    Some advice please- a loan went wrong
    • #1
    • 9th Sep 17, 3:51 PM
    Some advice please- a loan went wrong 9th Sep 17 at 3:51 PM
    Hi,

    I'm hoping to get some sound advice on a situation arising from a loan I lent a friend some time ago.
    Back in March 2015, A freind and colleague who I'd know for a quite a few years up until that point asked if I wanted to be involved in a business deal.
    He offered to be a guarantor if I paid money through him to several foreign students coming into the UK requiring education costs.

    He offered to pay me %20 interest on the overall loan (which was actually in several chunks) and I greedily accepted.

    The guy reckoned he could pay back £500 a month which seemed fine to me.

    Long story short though, he has paid me quite a chunk back but is now missing payments on a regular basis. It's come out that he's actually a chronic gambler and has now moved jobs to try and save himself some embarrassment.

    The sum is quite large so I have had to nudge him along sometimes to pay but since he has moved jobs he is now ignoring my efforts to get in contact.

    I have now informed him that this could end up in court and am sending him a pre action letter over the weekend.

    That's the basics of what happened anyway, but I'm curious if i do have to take this to court am I able to still claim the total amount including the %20 interest or do I have to disregard the interest?

    I do understand that I would probably lose some of it anyway due to taxes and that's ok.

    Also, I never did get a written contract or note from him but do have bank transfers of cash going from my account and others indicating re-payments.

    I have tons of phone text messages stored and Facebook messages as well.

    Please could anyone advise if I have a case and the best way to go about it?

    The amount I would want to claim is just under £10,000 and I'm aware that would fall under the small claims court.

    Thanks very much.

    Yes... I was a gullible idiot...
Page 1
    • Arleen
    • By Arleen 9th Sep 17, 5:34 PM
    • 988 Posts
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    Arleen
    • #2
    • 9th Sep 17, 5:34 PM
    • #2
    • 9th Sep 17, 5:34 PM
    Since you were charging him interest you were supposed to pay tax on the loan, did you? If not, HMRC will come knocking, and they won't be happy that you didn't disclose it yourself.

    Now you can claim for the interest, sure, and you will likely get a judgement against him. But as he is a gambler who is likely just above drowning don't expect to ever see any of your money back because collecting from private individuals is expensive and very risky, usually, you will only wind up with less money than you had before you started.
    • Shakin Steve
    • By Shakin Steve 9th Sep 17, 5:47 PM
    • 1,044 Posts
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    Shakin Steve
    • #3
    • 9th Sep 17, 5:47 PM
    • #3
    • 9th Sep 17, 5:47 PM
    How much, in total, did you lend him? How much have you had back, ignoring the interest.?
    I came into this world with nothing and I've got most of it left.
    • Glenn Stubberfield
    • By Glenn Stubberfield 9th Sep 17, 6:30 PM
    • 9 Posts
    • 1 Thanks
    Glenn Stubberfield
    • #4
    • 9th Sep 17, 6:30 PM
    • #4
    • 9th Sep 17, 6:30 PM
    Thanks for the replies.

    He is currently working so I am hopeful he either sees sense and starts paying again or pays if it goes to court.

    In regards to taxes: I never thought about it at the time and I will be honest and say even if I had known I would have neglected to disclose it.

    Of course if it goes to court I'm hoping that the tax would then simply be deducted since I haven't received any interest at all yet

    I loaned him £11.890 without interest and he has since paid back £4.805.

    One of the worst things about this is that the guy was paying back quicker at first (probably feeding me back any unspent money) but after a few months he started missing payments frequently.
    I am at the point now though that I'd be happy with £200 per month and he could miss the odd month or give whatever he can.

    He was taking large amounts of time off work which always came around payday. His excuses were shocking as well and disappointing.

    I have given him every possible lifeline except wiping the debt.

    Now that he is in new employment and been there a few weeks I would have assumed he would be at least back on his feet with his pay.

    He also inboxed me last week that he could give me £50 per week and would start this week...

    Very slippery and completely full of s**t about everything.
    • jonesMUFCforever
    • By jonesMUFCforever 9th Sep 17, 7:04 PM
    • 24,180 Posts
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    jonesMUFCforever
    • #5
    • 9th Sep 17, 7:04 PM
    • #5
    • 9th Sep 17, 7:04 PM
    If he has agreed to pay you £50 per week and you say you are happy to accept £200 per month - for now anyway why go down the legal route which will cost you more money?
    What goes around - comes around
    give lots and you will always receive lots
    • Glenn Stubberfield
    • By Glenn Stubberfield 9th Sep 17, 8:14 PM
    • 9 Posts
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    Glenn Stubberfield
    • #6
    • 9th Sep 17, 8:14 PM
    • #6
    • 9th Sep 17, 8:14 PM
    Because he's not actually giving me any money mate.
    • BrassicWoman
    • By BrassicWoman 9th Sep 17, 8:44 PM
    • 1,361 Posts
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    BrassicWoman
    • #7
    • 9th Sep 17, 8:44 PM
    • #7
    • 9th Sep 17, 8:44 PM

    Yes... I was a gullible idiot...
    Originally posted by Glenn Stubberfield
    Or a reckless opportunist seeking a 20% return, much like the gambler you criticise?

    Just an alternate opinion. Lenders have to price for the risk that they get nothing back on some of the deals.
    Downsized and mortgage free
    Nov17 grocery challenge £133.10/£150
    • Glenn Stubberfield
    • By Glenn Stubberfield 10th Sep 17, 1:06 AM
    • 9 Posts
    • 1 Thanks
    Glenn Stubberfield
    • #8
    • 10th Sep 17, 1:06 AM
    • #8
    • 10th Sep 17, 1:06 AM
    Yeah thanks for that
    • BrassicWoman
    • By BrassicWoman 10th Sep 17, 9:54 AM
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    BrassicWoman
    • #9
    • 10th Sep 17, 9:54 AM
    • #9
    • 10th Sep 17, 9:54 AM
    Yeah thanks for that
    Originally posted by Glenn Stubberfield
    I get you're hacked off; but essentially you've invested in a business without doing your due diligence. No one in this finanical environment gets 20% for doing nothing.

    I'd live and learn and move on.
    Downsized and mortgage free
    Nov17 grocery challenge £133.10/£150
    • Tarambor
    • By Tarambor 10th Sep 17, 9:55 AM
    • 1,571 Posts
    • 1,075 Thanks
    Tarambor
    Hi,

    I'm hoping to get some sound advice on a situation arising from a loan I lent a friend some time ago.
    Back in March 2015, A freind and colleague who I'd know for a quite a few years up until that point asked if I wanted to be involved in a business deal.

    Also, I never did get a written contract or note from him but do have bank transfers of cash going from my account and others indicating re-payments.

    I have tons of phone text messages stored and Facebook messages as well.

    Yes... I was a gullible idiot...
    Originally posted by Glenn Stubberfield
    Was it a loan or an investment? If it was the latter then sorry but it is a case of tough luck. If it was the former then usually without a written contract a loan between friends and family is pretty much unenforceable but thankfully you have proof of payments and the messages which is the only thing that will save you.

    However as I said you need to be absolutely sure it was a loan and not an investment and that if you are claiming it is a loan that he has nothing that says anything about investing in this venture. If it is proven to be an investment they come with risk and part of that risk is you can lose all your money. That you cannot claim for.

    Ultimately though he is a gambler and has no money. Whilst you may win a judgement against him this doesn't guarantee you'll see your money and he is unlikely to have sufficient assets to cover it either. And if he declares bankrupt then all previous debts are uncollectable.

    Personally I reckon you'll never see the money again and chasing for it other than getting the initial CCJ is throwing good money after bad so you should prepare yourself for that.

    Now going back to you, you of course have been declaring the interest you've been receiving to HRMC so it can be taxed appropriately? If not then that is tax evasion so before talking about people being slippery one may want to take a look at one's self.
    Last edited by Tarambor; 10-09-2017 at 10:01 AM.
    • sourcrates
    • By sourcrates 10th Sep 17, 11:44 AM
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    sourcrates
    Unless this guy actually has the money to pay you, which seems unlikely as he has a gambling habit, you are really wasting your time here.

    If you are going to do it, you must go all the way, a county court judgement is no guarantee of payment, that's just the start of the process, if you do get judgement in your favor you should escalate this to the high court and instruct HCEO `s to attend his property either for full payment, or to remove goods.

    On attendance they will be able to advise you of his situation an if its likely you will receive payment or not.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
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    • jonesMUFCforever
    • By jonesMUFCforever 10th Sep 17, 1:07 PM
    • 24,180 Posts
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    jonesMUFCforever
    Was it a loan or an investment? If it was the latter then sorry but it is a case of tough luck. If it was the former then usually without a written contract a loan between friends and family is pretty much unenforceable but thankfully you have proof of payments and the messages which is the only thing that will save you.

    However as I said you need to be absolutely sure it was a loan and not an investment and that if you are claiming it is a loan that he has nothing that says anything about investing in this venture. If it is proven to be an investment they come with risk and part of that risk is you can lose all your money. That you cannot claim for.

    Ultimately though he is a gambler and has no money. Whilst you may win a judgement against him this doesn't guarantee you'll see your money and he is unlikely to have sufficient assets to cover it either. And if he declares bankrupt then all previous debts are uncollectable.

    Personally I reckon you'll never see the money again and chasing for it other than getting the initial CCJ is throwing good money after bad so you should prepare yourself for that.

    Now going back to you, you of course have been declaring the interest you've been receiving to HRMC so it can be taxed appropriately? If not then that is tax evasion so before talking about people being slippery one may want to take a look at one's self.
    Originally posted by Tarambor
    Is the interest more than £1000 per tax year?
    If not he does not have to pay tax on it.
    What goes around - comes around
    give lots and you will always receive lots
    • Tarambor
    • By Tarambor 10th Sep 17, 1:19 PM
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    • 1,075 Thanks
    Tarambor
    Is the interest more than £1000 per tax year?
    If not he does not have to pay tax on it.
    Originally posted by jonesMUFCforever
    Err no. First of all that is only for savings. From the HMRC Fact Sheet:
    Savings income includes account interest from:
    bank and building society accounts
    accounts with providers like credit unions or National Savings and Investments

    It also includes:
    interest distributions (but not dividend distributions) from authorised unit trusts, open-ended investment companies and investment trusts
    income from government or company bonds
    most types of purchased life annuity payments
    None of which it is because he was acting as a lender therefore the interest is taxable income.
    • Glenn Stubberfield
    • By Glenn Stubberfield 10th Sep 17, 3:59 PM
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    Glenn Stubberfield
    If I were to claim back only the actual amount owed (£7100) minus all interest would that not just be a loan?

    I definitely 'loaned' him the money but I admit it might seem blurry where this becomes an investment or a loan, something I never thought of.

    Also if I were to win a judgement and he continued to not pay surely I could request an Attachment of Earnings Order?

    I have mentioned previously more than once that he is in full time employment...

    Cheers
    • Arleen
    • By Arleen 11th Sep 17, 12:46 AM
    • 988 Posts
    • 727 Thanks
    Arleen
    If I were to claim back only the actual amount owed (£7100) minus all interest would that not just be a loan?

    I definitely 'loaned' him the money but I admit it might seem blurry where this becomes an investment or a loan, something I never thought of.

    Also if I were to win a judgement and he continued to not pay surely I could request an Attachment of Earnings Order?

    I have mentioned previously more than once that he is in full time employment...

    Cheers
    Originally posted by Glenn Stubberfield
    Sure you can, but when that hits him he has many options to weasel out of the debts like DRO or bankrupcy, whichever may be applicable.

    Assuming that he has actual money left out of his salary every month in the first place, because if his head is justa above drowning, then he can't repay you anything.
    • Glenn Stubberfield
    • By Glenn Stubberfield 11th Sep 17, 2:50 AM
    • 9 Posts
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    Glenn Stubberfield
    Which is why I've invited him for months to actually just talk to me so we both know where we stand. He is constantly avoiding that though.
    • StopIt
    • By StopIt 11th Sep 17, 8:41 AM
    • 1,391 Posts
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    StopIt
    If this guy is a gambling addict there's a high chance he owes more than just you.


    If so, even a court would not help much. If he has no spare income because of other debts, he will either be ordered to pay a fraction of the balance (No, not near £200pm), or be ordered to pay Forthwith under the expectation that he'll default and likely file for a form of insolvency.


    Either way, you're not getting the money back unless if he decides has can pay, which is unlikely because a problem gambler will always put money on the horses before putting them back to paying debt.
    • BrassicWoman
    • By BrassicWoman 11th Sep 17, 9:14 AM
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    BrassicWoman

    I definitely 'loaned' him the money but I admit it might seem blurry where this becomes an investment or a loan, something I never thought of.
    Originally posted by Glenn Stubberfield


    I think that tells us that you don't have enough evidence to support a court case.
    Downsized and mortgage free
    Nov17 grocery challenge £133.10/£150
    • Arleen
    • By Arleen 11th Sep 17, 11:04 AM
    • 988 Posts
    • 727 Thanks
    Arleen
    Which is why I've invited him for months to actually just talk to me so we both know where we stand. He is constantly avoiding that though.
    Originally posted by Glenn Stubberfield
    Which means that he is done with you. You have a choice of just dumping this and moving on, or trying to send more money as a last ditch attempt to collect. Make your choice, though chances of collecting anything are slim - that is why companies buying the debt of private individuals do it for, quite literally, cents on a dollar.
    • Glenn Stubberfield
    • By Glenn Stubberfield 11th Sep 17, 2:17 PM
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    Glenn Stubberfield
    Thank you defaultuser,

    That was the plan going forward, to try and collect the £7100 in small installments.
    I am prepared to accept that without going to court.
    I am hoping he will get back in touch at some point soon but we'll see...

    Thanks again

    Glenn
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