Loans

christiang60

Hi,


I really need some help here and I've been advised this is a good place to start.
6 years ago I was given money from a relative to buy a house. After a few months a loan agreement was signed to say that we owed the money and it could be called back at anytime.
This agreement was done so if myself and partner got divorced then the relative could prevent my wife from having half of the money\house.
However since the agreement was made the relative has used this agreement to blackmail us for any little thing and its becoming extremely difficult now.
The was no repayment plan setup only that the loan could be recalled at anytime and interest would need to be paid once it had been recalled.


We do not have a copy of the agreement and was never given one. We signed it with a solicitor and the relative have kept the copy since


A friend has told us that they only have 6 years to reclaim the loan after that it cannot be reclaimed does anyone know if this is actually the case or not?






Thanks in advance

SeanG79

6 years after the date a payment was due and missed, then it would become statute barred. Payment isn't due until your relative calls in the debt. So how much time has passed since the loan was recalled?

MallyGirl

christiang60 wrote: »

6 years ago I was given money from a relative to buy a house.

so you weren't 'given' it - you were loaned it. Was it always understood as a loan?

Did you declare this to the mortgage company within the application or was it a later change?
I don't think you can claim it as statute barred - you just need to get a copy of what you signed and work out what the actual agreement was.

christiang60

The money was initially given to buy a house but the relative wanted security if there was a divorce my wife could not take half the house money etc.
The loan was recalled 3 years ago as a threat if you like via a solicitors letter no payment has ever been made and no further requests made.
But it has been literally if you don't make me a cup of tea I'm going to call the money back. Its caused myself high blood pressure and my wife now has a skin condition which is caused by stress.


So would the statute barred be from the date of the loan agreement or the date of the demand from the solicitor 3 years ago?


Thanks

[Deleted User]

Ask for a copy of the agreement.

christiang60

The problem I have is if I ask for the agreement then I could be shooting myself in the foot so to speak as a court demand has not been made and this could escalate the issue.
This is a substantial amount of money and it would mean we would lose our home which is not a good idea with 3 children.
The worse thing is we never asked for the money the relative viewed the house and offered to buy it for us and said not to worry about the money. Lord be hold we have worried ever since.

Brock_and_Roll

What interest rate is in the loan agreement? If it was 6 years ago there is a good chance it is well above current mortgage rates.


The obvious suggestion would be to mortgage/remortgage the house to pay off the relative - this of course depends on your incomes and the likely loan to value.


With hindsight, it was a very bad idea to have the loan "repayable on demand" - which makes it akin to an overdraft. Generally you want to match long term assets with long term finance and vice versa.


Was the loan secured against the property? If not then it potentially could be Statue Barred after 6 years BUT this would not necessarily improve your blood pressure as the relative could still "hassle" you for the money even if his legal routes to recovery are potentially blocked.


Perhaps a compromise and a way to piece of mind is to agree with the relative a proper repayment plan?

christiang60

I believe the interest is 8% and no it was not secured on the property.


We suggested at the time that we setup a mortgage payments but that was dismissed and the answer was your just having your inheritance early.
It looks like we will have to live with this for sometime longer unless it is called or sell our house.


Thanks everyone for your help I have a meeting with a solicitor this week so at least now I'll have an idea have would he will say in advance.

Clive_Woody

christiang60 wrote: »

I believe the interest is 8% and no it was not secured on the property.


We suggested at the time that we setup a mortgage payments but that was dismissed and the answer was your just having your inheritance early.
It looks like we will have to live with this for sometime longer unless it is called or sell our house.


Thanks everyone for your help I have a meeting with a solicitor this week so at least now I'll have an idea have would he will say in advance.

Not wishing to pry, but have you been paying into a savings account to potentially prepare for the day you have to repay the loan? Living rent/mortgage free for 6 years presumably meant you have "spare" funds. If not I suggest you start a savings pot ASAP.