Personal debts to friends and family

shroomdoom

Hey everyone,

Bit of a sticky situation that I'm not sure how to cope with. Essentially, I had a rough time of unemployment for the first 6 months of this year. In that time I relied on family and friends to survive. I went on to work a temporary contract for 3 months which allowed me to get by without borrowing further but unfortunately didn't pay me enough to pay back debtors.

I have one friend who lent me €2000 and he has made my life a living hell. He has humiliated me to former employers, he's contacted family members and, out of desperation, I signed a promissory note with him last month which was unrealistic.

The light at the end of the tunnel is that I now have permanent employment and will start shortly and I do absolutely intend on paying this individual back and I also appreciate that he needs the funds back and is entitled to them.

I'm not in the UK, I'm in Ireland but our laws regarding debts, debt collection, promissory notes are essentially copy and pasted from English statute books so I'd appreciate any advice. I'm at my wits end.

Did I screw myself by signing that promissory note? I'm afraid he'll contact my family and employers again.

sourcrates

Hi,

A promissory note is something you don't hear much about nowadays, maybe they are more popular in Ireland, I don't know.

To be honest, this lies somewere between an IOU and a written contract, so in order to "make you pay" this freind would still have to use normal legal channels that are open to everyone.

That would be issuing a claim form from the county court, or Irish equivalent, in order to get his money back.

So the note is of little value to them really, dosent give them anymore legal standing.

Times have been tough, fair enough, but you should try your best to repay this freind ASAP.

shroomdoom

Thanks for your advice.

I absolutely will pay them back, I'm sad that I never heeded the advice of how money can damage a friendship. I start full time employment next month but he wants repayments that equate to 25% of my monthly salary which I can't afford.

I work in a professional industry and now have to rebuild my reputation; I just want this over with.

sourcrates

shroomdoom wrote: »

Thanks for your advice.

I absolutely will pay them back, I'm sad that I never heeded the advice of how money can damage a friendship. I start full time employment next month but he wants repayments that equate to 25% of my monthly salary which I can't afford.

I work in a professional industry and now have to rebuild my reputation; I just want this over with.

Just pay what you can afford, they will probebley be glad to get anything.

SophieLoui23

I'm certainly not the best person to answer your question on promissory notes but I just wanted to say that I've been in this exact situation, albeit a couple of years ago now.

Have you worked out how much you can afford to pay him back on a monthly basis, considering your new income and monthly bills/commitments? I would suggest that once you've worked that out, you try and discuss this potential repayment figure with him and make an agreement (preferably verbal) on that basis. I appreciate this may be easier said than done but hope you can resolve this with him.

shroomdoom

I've calculated things such as my tax, PAYE (National Insurance in the UK) and Universal Social Charge. I've also added up rent, bills etc and also I want to save a certain amount each week in case anything unexpected occurs.

I just can't deal with the way people look at me and talk to me when they know I've got myself into this mess. Even those that know I've had no ability to pay anything up to this point casually drop in 'jokes' about me just wanting not to pay.

Sambella

shroomdoom wrote: »

I've calculated things such as my tax, PAYE (National Insurance in the UK) and Universal Social Charge. I've also added up rent, bills etc and also I want to save a certain amount each week in case anything unexpected occurs.

I just can't deal with the way people look at me and talk to me when they know I've got myself into this mess. Even those that know I've had no ability to pay anything up to this point casually drop in 'jokes' about me just wanting not to pay.

It is probably best to not save for a while and pay this friend back asap. As soon as the debt is repaid to can happily save what you can.

SophieLoui23

shroomdoom wrote: »

I've calculated things such as my tax, PAYE (National Insurance in the UK) and Universal Social Charge. I've also added up rent, bills etc and also I want to save a certain amount each week in case anything unexpected occurs.

I just can't deal with the way people look at me and talk to me when they know I've got myself into this mess. Even those that know I've had no ability to pay anything up to this point casually drop in 'jokes' about me just wanting not to pay.

I totally understand where you're at. It's horrible and your hands have been tied with no income and therefore no way of resolving this. People really do show their true colours when you are in the worst positions (trust me, I lost a few 'friends' over the person who humiliated me over money). But you're now in a position to deal with this. The best thing I would suggest is to create an SOA (statement of affairs) here: http://www.stoozing.com/calculator/soa.php

Make sure you include everything and at the end it will give you an idea as to what you will be able to pay back to him. Some people like to post their SOA on here, to get advice as to how they can save money, others prefer to keep it private but I found it to be a real eye opener as to what I was spending and what I could realistically afford.

Do you think he will be open to a payment plan, based on your calculations?

shroomdoom

Thanks for the link, that's really helpful!

He essentially said if I don't pay the agreed amount, he will destroy my life and use the promissory note in court. To be honest, I understand how he feels and I just wish I could rectify this straight away.

My offer is going to be half of what he's requested per month, starting two weeks later than he requested...I'm afraid to even contact him about the offer because I'm afraid it will trigger more humiliation.

shroomdoom

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1688
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1688

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 350
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 40
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 20
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 20
Groceries etc. ......................... 300
Clothing................................ 50
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 45
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 15
Entertainment........................... 150
Holiday................................. 0
Emergency fund.......................... 100
Total monthly expenses.................. 1140


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Friend 1.......................2000......400.......0
Friend 2.......................350.......100.......0
Friend 3 ......................300.......100.......0
Littlewoods....................300.......30........39.9
Total unsecured debts..........2950......630.......-


Monthly Budget Summary
Total monthly income.................... 1,688
Expenses (including HP & secured debts). 1,140
Available for debt repayments........... 548
Monthly UNsecured debt repayments....... 630
Amount short for making debt repayments. -82

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -2,950
Net Assets.............................. -2,950

Not included are unforeseen expenses and, most importantly, discretionary good will payments to family members that helped me too.

SophieLoui23

shroomdoom wrote: »

Thanks for the link, that's really helpful!

He essentially said if I don't pay the agreed amount, he will destroy my life and use the promissory note in court. To be honest, I understand how he feels and I just wish I could rectify this straight away.

My offer is going to be half of what he's requested per month, starting two weeks later than he requested...I'm afraid to even contact him about the offer because I'm afraid it will trigger more humiliation.

He reminds me of someone I used to know :mad:

The next couple of options probably aren't the best solutions but worth considering anyway. I know some (or all) won't be feasible:

1. Is there anything you can sell to help raise some money towards paying off this guy? Anything that can be put on eB*y (clothes, tech equipment, old mobile phone?)

2. Is there any way you can get a second job? Not sure what your new job is / hours will be but could you get a temporary / part time job to work alongside? I picked up some bar shifts whilst I was really struggling.

3. Probably a last case scenario. Is there anyone who would help you out? Preferably a very close family member who you trust 100%. Could anyone like that lend you the money, to save you any further humiliation?