Loan for a 'friend'

Hannah0205

Hi,
I am asking for advice for a friend. So my friend got out a loan for his 'friend' a while back because he was desperate for the money, they had been friends since they were little and my friend thought he could trust the 'friend' to make the repayments. They had discussed it at length and worked out repayment dates and charges etc. then he took out the loan.
The 'friend' took all of the money and disappeared, my friend tried to make contact to get the repayments but he had no luck finding/contacting him. For years he has been repaying back the idiots loan but recently he is finding it hard to make these payments without having to struggle each month.

Does anyone know if there is anything he can do?
Thanks in advance.

Mojisola

Did they have a written agreement?

Hannah0205

I don't think they do have a written agreement no.

Mojisola

Has Friend B ever made repayments to Friend A through a traceable means (rather than cash)?

Hannah0205

Yes, I think for the first couple of months he made repayments to him through bank transfers

DCFC79

It will be hard for your friend to get anything back, much akin to blood from a stone. I hope your friend has learnt the lesson to not lend money to a friend.

Brock_and_Roll

Just to absolutely clear, there is NOTHING your friend can do to avoid making the re-payments to the loan company, other than default. You friend after all signed a legally valid agreement with them.


However, your friend MAY be able to sue his ex-pal using Money Claim Online (aka the small claims court) . This is not easy for various reasons. Firstly your friend will have to have tracked down the other person. Secondly there would have to sufficient evidence to convince the court that on the balance of probabilities, your friend had a valid loan agreement with his ex-pal. Thirdly, even if your friend obtains judgement in his favour, it does not mean he will ge the money owed - if the ex-friend has no assets or income then it will only be a pyrrhic victory.


In most cases, it is probably best to write off the money and chalk it up to experience - never lend to friends and family.

Hannah0205

It's not so much about getting the money back (that would obviously be a massive bonus) it's about having help to stop making repayments (which isn't going to happen) or to have help to decrease the repayments.

The loan isn't a small loan, he still has around £18,000 left to pay unfortunately. So I don't think he will be able to go to the small claims court about this.

Brock_and_Roll

Crikey - £18k.....


Does your friend have any assets? (house with equity, nice car etc?)


Would an impaired credit rating be a big problem? i.e. is he likely to want to buy a house in the next 6 years etc


Does he have a job where insolvency/bankruptcy is a non-starter?

Mojisola

Hannah0205 wrote: »

So my friend got out a loan for his 'friend' a while back

For years he has been repaying back the idiots loan but recently he is finding it hard to make these payments without having to struggle each month.

Hannah0205 wrote: »

It's not so much about getting the money back (that would obviously be a massive bonus) it's about having help to stop making repayments (which isn't going to happen) or to have help to decrease the repayments.

The loan isn't a small loan, he still has around £18,000 left to pay unfortunately.

I would suggest talking through his finances with one of the debt charities.

Hannah0205

£18k... I know

He doesn't have any assets no.
I agree with talking to one of the debt charities. I think that will have to be his next move.