Loan Advice

nkzk2

Apologies if I've not posted this is the right place.....
I am looking for a bit of advice regarding loans for a friend...
I don't know the full in's and out's but he took an unsecured loan out for his son (who was unable to get one on his own-credit rating i think), the loan was over a 5 year period and he has been paying my friend each month, but for the past three months he has been unable to make the payments and it has been my friend whose done so. He's now said that he is unable to make any further payments....as this loan is in my friends name and not his sons, could his son be held in anyway responsible for its repayment?...or would it solely be my friend? ....he can evidence it was paid to his son, bank transfer of original loan amount to him and also the payments he's made to my friend each month up until a few months ago?...any advice would be appreciated. Thanks

dealer_wins

nkzk2 wrote: »

Apologies if I've not posted this is the right place.....
I am looking for a bit of advice regarding loans for a friend...
I don't know the full in's and out's but he took an unsecured loan out for his son (who was unable to get one on his own-credit rating i think), the loan was over a 5 year period and he has been paying my friend each month, but for the past three months he has been unable to make the payments and it has been my friend whose done so. He's now said that he is unable to make any further payments....as this loan is in my friends name and not his sons, could his son be held in anyway responsible for its repayment?...or would it solely be my friend? ....he can evidence it was paid to his son, bank transfer of original loan amount to him and also the payments he's made to my friend each month up until a few months ago?...any advice would be appreciated. Thanks

Your friend took the loan out, he is 100% responsible and liable for the debt.

Whether he spent the money on a spin of a roulette wheel, threw it out of the window, or lent it to his son makes no difference.

He can take his son to court for the money he lent his son, but that has nothing to do with the loan he took out in his name.

nkzk2

Hi, thank you for your response, we hadn't thought about the court option...my friend doesn't have anything in writing from his son stating that he would repay any money, do you think court would still be an option?, my friend bank transferred the money to his son originally and since then his son has been paying him each month but other than that there's no legal agreement between them?.. thanks

Gaz83

nkzk2 wrote: »

Hi, thank you for your response, we hadn't thought about the court option...my friend doesn't have anything in writing from his son stating that he would repay any money, do you think court would still be an option?, my friend bank transferred the money to his son originally and since then his son has been paying him each month but other than that there's no legal agreement between them?.. thanks

Oft-repeated advice on here is never to lend to friends or family. If it goes wrong it can ruin a relationship.

He could try taking him to court and leave it to the balance of probability to decide whether it was judged to be a gift or a loan. The fact that there has been regular payments might go some way to proving it was a loan and not a gift.

However, even if it's determined that it was a loan, the court can't force someone to pay what they don't have. If he doesn't have any money, then it doesn't matter if your friend wins his case - he's not going to get reimbursed.

It might be better to chalk this one down to experience.

bargainbetty

Is there a reason why the son is unable to make further payments? If he has lost his job, or had increased expenditure, your friend needs to explain to his son that he needs to pay as much as he can towards the monthly payments, and will have to continue paying until he has cleared the debt and costs in full.

If he will not repay his father what he owes him, your friend needs to make it very clear to other family members what the son is doing, and not to lend him any money in future.