£70k and rising advice please

keithgypps

I loaned a friend & his wife £50k for a property deal in April 07 payable back after 1 year at 20% interest, i paid monies electronicaly into thier bank account and all parties my wife and i and him and his wife signed a loan agreement. In April 08 money owed was not forthcoming and they asked me to extend stating it would be another few months before the property was finished, i reluctantly agreed and have email trails of all of the above. The total, £70k as of April 09 has not been paid and i received an email saying that they were intending to talk to the council to convert some barns into holiday lets and once converted they could re-mortgage them and pay me back. It would seem then that in two years they havent done anything with the house and i believe its because the guy accepted a good job offer and therefore hasnt had the time to do the property.
I now need the money back, i have had to re-mortgage my house in order to put monies into my business that i would have had if i had been paid back on time. The relationship has fallen apart and therefore i have threatened reluctant legal action, they have replied stating that if i go legal they will enter into an IVA. Looking at IVA on the internet it would seem that they can do this. Question please folks, What would you do?

Ignore the threat of IVA and go full blown legal risking the money if they counter with an IVA. sorry for the long message you can appreciate i am at my wits end here especially it being a friend!!

Rafter

If the money has been used to buy property, I suggest you get a solicitor to try and secure a charge on the property to at least protect your original £50k.

However, you must have realised the risk involved given a 20% return in one year?

I suggest you try and get relations back with your 'friend' as the best way of protecting your investment.

Doesn't sound like they have the money to pay you back until they can refinance their property investments and you going legal isn't going to make the slightest difference.

As I said before, best bet would seem to be to secure your investment on the property so it cannot be sold without you being paid back and then work with your 'friend' using your business skills to try and help get things moving.

R.

cyril82

talk of an iva would worry me as it would indicate that they simply don't have you're money.

Maybe they have lost it in the property because of the housing market crash?

i think i would quietly speak to a solicitor about getting a charge on their assets, do they have any assests? i know you mentioned they speke of "developments" they are working on but do you know that these developments exist?

CLAPTON

They can't simply do an IVA... their creditors (including you) have to agree... so it's not a goer

why can't they remortgage now and pay you back

what happened to the money

otherwise see a solicitor and take legal action .. court order to pay, charging order on property, bankrupt them

keithgypps

Thanks for the replies everyone. I appreciate that 20% is an incredibly high interest rate but its a rate that was offered to tempt me to part with my money, I dont think i would have done it if it wasnt such a high rate. I havent mentioned that they promised to put me on the deeds of there new property (nice country residence with outbuildings they intended to convert and turn into holiday lets) however they have refused every request i have made since then to do this. Re the IVA is it right that a creditor (me) would have to agree to it and that they just cant simply enter into one. Even with the property slump they are still sitting on £350k plus in house value and i calculate close to £150k equity. They refuse to re-mortgage stating that they have a fixed rate fixed term (2 years) mortgage and that it would cost them over £20k in early redemption penalties, My thoughts are that to keep there existing mortgage and merely top it up wouldnt cost them anything?

CLAPTON

reread my post

google IVA
google bankruptcy
google solicitors

Gymgenius

keithgypps wrote: »

Thanks for the replies everyone. I appreciate that 20% is an incredibly high interest rate but its a rate that was offered to tempt me to part with my money, I dont think i would have done it if it wasnt such a high rate. I havent mentioned that they promised to put me on the deeds of there new property (nice country residence with outbuildings they intended to convert and turn into holiday lets) however they have refused every request i have made since then to do this. Re the IVA is it right that a creditor (me) would have to agree to it and that they just cant simply enter into one. Even with the property slump they are still sitting on £350k plus in house value and i calculate close to £150k equity. They refuse to re-mortgage stating that they have a fixed rate fixed term (2 years) mortgage and that it would cost them over £20k in early redemption penalties, My thoughts are that to keep there existing mortgage and merely top it up wouldnt cost them anything?

If they have got £150K equity, then they are clearly taking the mick. You need to get hard on them, as the relationship has already broken down - consult a solicitor asap.

Tell them you'll see them in court.