Loans

Paul59

Hope someone can help with this.

My brother died recently, leaving a will and naming me as executor.

The question is: I have just found out that my brother made a loan to a friend, who now says that this was a gift. I have bank statements showing regular payments (same amount each month and on the same date) into my brothers account from this person. I cannot find a written agreement with regard to this loan.

Would this still be classed as a loan and how could I recover the loan.

Many Thanks

nom_de_plume

Probably the first question to ask is is the sum of money outstanding sufficient to warrant chasing?

Do you know the original sum loaned and do the monthly repayments relate in an obvious way to the loan. By this I mean 1/12th or 1/24th for example. Is there a bank statement showing the sum loaned?

I suspect that, armed with sufficient evidence, it may be worth a punt through the small claims court.

Paul59

My late brothers bank statement shows the payment out as well as the payments in from his friend. This info also matches a spreadsheet that is on my brothers computer. This shows what the loan was for and the repayments made up to the month before he died. Balance outstanding is around 10K

Thanks

hardpressed

This seems good evidence but how do you feel your brother would want this handled? Is 10K a significant compare to what your brother left. Does you brother have any dependants who need this money? If there are debts to be pay and nothing to pay them with then you will probably need to pursue the friend for repayment.

NAR

What a despicable "friend." Your local CAB should have legal people who could advise you for free. It seems terrible that this person can get off repaying their debt.

Flugelhorn

presumably the friend has not got 10k to hand otherwise they wouldn't have borrowed it off your brother.. perhaps he is worried about having to find the 10k immediately and are hoping to at least delay things.
Perhaps they need to be offered a payment scheme (similar to that your brother arranged)

madbadrob

With the bank statements and the spreadsheet there is sufficient evidence to show that a loan was made and that it was not a gift. 10k is not a minimal amount and you should in my opinion get a solicitor involved with this. CAB may offer advice but I am not sure has to what they can do other than advise to help you.

You say that the debt is about 10k. This is something you need to get exact because Small Claims stop at 10k so if it is 10,001 it would need to go to a full court and this would probably lead to the friend being declared bankrupt. A solicitor would be better placed to advise here

Rob

joerugby

Don't jump to conclusions. Your brother may have agreed verbally that his friend should pay back what he can, when he can with no time limit and even no interest. Death would not necessarily trigger repayment in full.

Reaching some form of agreement with the friend would be preferable e.g. write off x % and repay y % in instalments over z months

As a suggestion, I would be prepared to write off the amount which might otherwise get spent on solicitors' costs

madbadrob

Joe,

If there are regular payments showing the same figure say every month then that is enough to show that a loan was agreed and that those are the repayment terms. The OP hasnt said they want the money back immediately but that the friend has said it was a gift not a loan.

The court would have to look at the evidence provided and deduce what the agreement whether verbal or not, and then make a judgement. There are no ifs and buts in law. Without the person making the loan/gift alive the evidence as presented here would suggest this was never a gift but a loan. If a court would agree is another matter

Rob

John_Pierpoint

An unsecured verbal loan ?
Now go onto one of the desperate "I am in debt" to a loan shark boards on MSE, and post the query the other way round.
I would expect you to get advice along the lines of
"Threaten to report the !!!!!! to the police/trading standards for trading without a licence".
&
"Shop the shark to HMRC for unpaid tax".

On a personal note once upon a time, I lent some money to a neighbour who needed to get through Xmas and who had some unexpected expenses (Heating breakdown etc.). However I did have the good sense to get a cheque for the repayment(s) that I agreed not to present until a date in March.
Blow me the payer died soon after Xmas.
I paid in the cheque and it duly bounced.
Needless to say the executors, family members who had refused to help out before Xmas, tried hard to deny the debt; but I was able to stick to my guns and repeat the mantra "this is a valid bill of exchange pay it" which they eventually, inspite of 2 attempts (£250?) by their solicitor to delve into the why's and wherefores of the situation..

You are likely to get drawn into all sorts of ifs buts and maybe's and does the debtor have any money to pay?
I doubt that there are many banks that would lend £10k to someone of no honour without security.

Let us know how you get on.

joerugby

madbadrob wrote: »

Joe,

If there are regular payments showing the same figure say every month then that is enough to show that a loan was agreed and that those are the repayment terms. The OP hasnt said they want the money back immediately but that the friend has said it was a gift not a loan.

The court would have to look at the evidence provided and deduce what the agreement whether verbal or not, and then make a judgement. There are no ifs and buts in law. Without the person making the loan/gift alive the evidence as presented here would suggest this was never a gift but a loan. If a court would agree is another matter

Rob

That's why reaching an agreement with the "friend" would in my view be the best course of action