Court Action Personal Loan Interest?

Glenn_Stubberfield

Hi,

I'm presently in the process of taking someone to court over an unpaid personal loan between two individuals.

I understand that I can reclaim interest and there is a set calculation for this.

I am not very clear on what the date would be to claim this interest from?

The amount to be repaid is £6500 and this amount was paid to the individual over 7 separate payments- each on different dates within a short time period.

The first loan date was in April 2015.

The person has already paid back a large portion of the original loan so do I just claim interest on the outstanding balance from the first loan date or from the date it should have all been paid back?

Or am I to calculate from each of the 7 separate dates?

I'd really appreciate any advice on this as I want to try and keep my claim to the letter as much as possible.

Thanks in advance.

System

OK first of all do you even have a legally enforceable agreement in place? If the loan was between friends/family with nothing written down then basically forget the money, you'll not stand a chance of enforcing the loan through court.

In order for a loan to be enforceable, especially one between friends and family which are notoriously hard to enforce, it needs to include the amount lent, the rate at it is to be paid back at, the date it is to be repaid by, the costs for the borrowing (the interest you'll be adding on), the total amount to be repaid and any penalties for missed payments.

If you lend someone money and you don't put down the date it needs to be repaid by then legally they have forever to repay it.

If you lend someone money, agreed between you monthly payments but not written that part down, and are trying to claim before the date the loan has to be repaid by then a claim will fail until the date it has to be repaid by is reached.

Now assuming you've an enforceable one Statutory Interest you're thinking of only applies to commercial debts, i.e when an individual owes money to a business or a business owes you money and it applies from the date the money is owed, not when the claim is filed. With a personal loan between two private individuals you cannot claim interest unless you stated in the terms of the loan that if they defaulted there would be interest applied. You cannot claim for anything you've not stated in the terms and conditions of the loan.

Glenn_Stubberfield

Thanks

Where would I stand with written proof of a set monthly payment?
We did not set an end date but with a set monthly installment would that apply as an end date?

Also, the person did agree (in writing) to pay back a set lump of interest on the overall debt.

My aim going forward was to just disregard that interest as I felt that would be better looked upon by the court.

Should that interest still apply and would I be taxed on it?

cheers

jonesMUFCforever

Do you have a consumer licence to lend and charge interest?
If not it will be easy for them to get the case thrown out of court.

Go for the capital amounts outstanding and ask the court to award costs.

System

Glenn_Stubberfield wrote: »

Thanks

Where would I stand with written proof of a set monthly payment?
We did not set an end date but with a set monthly installment would that apply as an end date?

If you set no end date then there is no end date.

Also, the person did agree (in writing) to pay back a set lump of interest on the overall debt.

Was the rate of interest set out and the amount payable also set out in writing as well? If not then that is viewed as an unfair term of contract and therefore unenforceable because the person cannot know what the interest rate is in order to make a decision of whether it is a good deal or not.

My aim going forward was to just disregard that interest as I felt that would be better looked upon by the court.

The only thing the court will be concerned with is if you have a legally enforceable agreement and that the terms of that agreement have been broken. Whether or not you disregard the interest makes no difference to your success, it all hangs on what was written down and signed for. As you're not a commercial body and nor is the other party then statutory interest can't be claimed. If it can be then the court will automatically calculate it for you so I would not overly concern yourself with it.

Without knowing exactly what was put down in writing its hard to say whether or not you have an enforceable claim.

System

jonesMUFCforever wrote: »

Do you have a consumer licence to lend and charge interest?

Not required for loans to friends/family.

Glenn_Stubberfield

Thanks very much for the answers.

I'll just go through what I did not get from this person. Please understand I blame my own naivety as well.

1. I did not get a written paper contract with a signature because I believed you did not always need a written contract now with other forms of evidence.

2. I did not set an exact end date.


The things I did get and again I believed this form of evidence would be sufficient, it might be worth mentioning also that the person does acknowledge they owe me the money in all corrospondance I've had with them:

1. Phone text messages

2. Facebook mesages

3. signed receipt of the pre court action letter

4. letters from the bank in which I've tried to reverse the payments.

5. Bank statements with all payments to the person recorded and all re-payments back to me.


If I just try and claim back the original amount (no interest) but with court costs do you think I have a leg to stand on?

I'd even accept about a £100 per month if it would just keep chipping away at it (even ever so slowly...) and I'd make this clear to the court.

Tnanks again

Arleen

Glenn_Stubberfield wrote: »

Thanks very much for the answers.

I'll just go through what I did not get from this person. Please understand I blame my own naivety as well.

1. I did not get a written paper contract with a signature because I believed you did not always need a written contract now with other forms of evidence.

2. I did not set an exact end date.

You don't need this contrac to be written, but if it did not have an exact end date - how do you plan to prove that the person is in a breach of your loan agreement?

Glenn_Stubberfield wrote: »

The things I did get and again I believed this form of evidence would be sufficient, it might be worth mentioning also that the person does acknowledge they owe me the money in all corrospondance I've had with them:

1. Phone text messages

2. Facebook mesages

3. signed receipt of the pre court action letter

4. letters from the bank in which I've tried to reverse the payments.

5. Bank statements with all payments to the person recorded and all re-payments back to me.


If I just try and claim back the original amount (no interest) but with court costs do you think I have a leg to stand on?

I'd even accept about a £100 per month if it would just keep chipping away at it (even ever so slowly...) and I'd make this clear to the court.

Tnanks again

You should put a claim for court costs with your case, if judge feels you were not just in it he/she will not award them. Also the reality is that if they are not talking to you anymore, they may not even show up in court and then you will get a default judgement against them - that's how usually this sort of cases go. But the problem then is to actually collect anything on the CCJ, as enforcing judgement against someone who doesn't want to pay and has no assets to speak off is, generally speaking, a waste of money.

So I would say gather all the information you have, fill your claim for outstanding balance + court costs (forget the interest, save yourself a headache) and then hope that maybe the friend will decide to pay to not get a CCJ. But in reality he won't even show up, and you will not see a dime.

Glenn_Stubberfield

Even though I didn't set an exact end date, because I did set out monthly payments would this apply as period when the loan would be expected to be paid?

Honestly at this point, I'd be happy to just get paid, even if the payments are quite low.

The person is in full time employment.

If I was to win a judgement, am I eligible to file an AOE or does it not work that way?

I understand the debtor would need to continue missing payments after the judgement for me to attempt to enforce the debt recovery.

Thanks again

Arleen

Glenn_Stubberfield wrote: »

Even though I didn't set an exact end date, because I did set out monthly payments would this apply as period when the loan would be expected to be paid?

That's not how the defendant will present it, which is why you want paper to back those things back, signed before money changed hands. Anything agreed afterwards is unlikely to be binding.

Glenn_Stubberfield wrote: »

Honestly at this point, I'd be happy to just get paid, even if the payments are quite low.

The person is in full time employment.

If I was to win a judgement, am I eligible to file an AOE or does it not work that way?

I understand the debtor would need to continue missing payments after the judgement for me to attempt to enforce the debt recovery.

Thanks again

Sure, you can try to go for AOE after you get the judgement, or any other form of enforcment that you desire. You can find the details here: https://www.gov.uk/make-court-claim-for-money/enforce-a-judgment and you can go that route as soon as he doesn't comply with the order made by the judge. But also keep in mind that any enforcment will cost you out of the pocket, and doesn't guarantee resoluts, even when talking about AOE. You may want to read up: https://www.citizensadvice.org.uk/debt-and-money/action-your-creditor-can-take/creditor-takes-money-from-your-wages/

And of course, the ever-looming problem that if you owe a lot, don't earn enough and people are pressuring you for debt - you can always go bankrupt.

Glenn_Stubberfield

Thanks very much for that.

I was unsure if I could even ask for an AOE as it seems to be only used for CSA or unpaid fines- it seems like a more obvious choice to me if the debtor is working?

I do accept that because I don't have a paper contract with an end date, it will make it harder (and longer) to get back the money owed but seriously at this point even f I don't get it all back but some of it I will be satisfied.

The person borrowed this money under false pretences and I fell for it because I trusted them.

It is not just a case of a friend falling on hard times and needing a helping hand.

It's part of the reason why I do not want to just wipe this debt without some sort of fight.

This person may or may already have pulled this stunt on others...