Are Family/Friend Debts Considered Secondary In Court?

cockneycomputer

If a person is taken to court by a Bank (CCJ) but the person taken to court also owes others banks and friends/familys money - are all debts considered equal?

For example someone owes -:

Bank A (£3,000) - Bank A take person to court over the debt via CCJ
Bank B (£4,000)
Credit Card A (£2,000)
Credit Card B (£5,000)
Family Member A (£2,500)
Family Member B (£1,000)
Family Member C (£600)
Friend A (£5000)
Friend B (£700)

In the above example if all the family/friend debts are legit (can be proven) are they considered the same as the bank and credit card debts. Or will the judge rule as the are family/friend debts they are considered secondary to the bank debts (less of a priority given). Finally, will Bank A who take out the CCJ judgment get a priorty in terms of payments as they started court action (paid at the expense of other creditors getting paid)

cockneycomputer

Anyone know please?

billinghamfan

Do you have agreement drawn up in writing for the friends and family debts or are they informal?

MrsTinks

Unless the family members and friends have proof of debt and get it enforced by the courts (small claims) then it is of no official standing when it comes to a court considering your SOA and available funds for repayment. Moral obligation and legal obligation are two separate matters.

Will creditor 1 get preference over the other official creditors? No they shouldn't. But this is why any CCJ hearing should be attended and defended. If a SOA isn't presented to the court how can they fairly determine that the other creditors are being paid x amount and that the payments are pro-rata to all?
Once a CCJ is in place however should something happen I would advise doing all that can be avoided to default on the CCJ as it simply gives the creditor an excuse to seek further ways of recouping monies owed like sending in the bailiffs if they can prove to the court that the agreement and judgement has been broken. Make sense?

cockneycomputer

All thanks for your replys. It seems unfair that family and friends lose out as they are also owed money. For all the debts (my cousin who I am trying to help) wrote down on a piece of paper how much he owes each family/friend and how much he would pay them each month until the debt is cleared. This was signed by both him and the person he owes and a witness. What else would he have to do to ensure any repayment plan agreed by the courts allows his family/friends to get repaid as well?

cockneycomputer

Just to add the documents were created two months ago when he asked for my help. We did a SOA for him and then with what was left we split amongst all those he includes money to.

What else can he do so that if he went to court the money he owes to family/friends is recognised by the court. After all he did borrow money of them as well as the banks.

In a similar respect if family/friend borrowed £6,000 to me they could take me to court and it would be recognised. So, why is it in the above case a similar debt owed to family/friends is not? Vey confusing

DVardysShadow

MrsTine wrote: »

Unless the family members and friends have proof of debt and get it enforced by the courts (small claims) then it is of no official standing when it comes to a court considering your SOA and available funds for repayment. Moral obligation and legal obligation are two separate matters.

????? AFAICS, it would be sufficient to have proof for friends and family debt to include it on an SoA. Yes, the creditor seeking a CCJ might query such debts after they prove their case and they reach the state of seeking an order to remedy the debt. But it should be something which can be addressed there and then as part of determination rather than friends and family having to seek their own CCJ's. Otherwise friends and family would be finding that other credotors are treated more favourably by the courts.

cockneycomputer

Thanks for that - it is good to know family/friends debts are not classed as secondary debts.