Lent a friend money

in Loans
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Samuel12345Samuel12345 Forumite
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First Post
MoneySaving Newbie
Evening guys,

Long time reader of the forum, first time poster.

I’ll keep it as short as possible. I’ve lent a friend £40k and have since discovered that he has wasted this money and not used it for its intended purpose. This was meant to be a short term loan.

I have messages and bank transactions as proof. He has agreed to pay me back £500 a month, but obviously there is no guarantee of this. Is there anything that can be done legally? He is in full time employment, I’ve read up on CCJs but I’m not sure what the process is.

Any help/advice is appreciated.

Thanks
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Replies

  • DCFC79DCFC79 Forumite
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    Evening guys,

    Long time reader of the forum, first time poster.

    I’ll keep it as short as possible. I’ve lent a friend £40k and have since discovered that he has wasted this money and not used it for its intended purpose. This was meant to be a short term loan.

    I have messages and bank transactions as proof. He has agreed to pay me back £500 a month, but obviously there is no guarantee of this. Is there anything that can be done legally? He is in full time employment, I’ve read up on CCJs but I’m not sure what the process is.

    Any help/advice is appreciated.

    Thanks

    You dont need tp know the process for CCJs yet as the first step is small claims court, its all done online.

    Is he likely to just disappear, does he have a family ?

    Is he he wanting to pay you back or is he just saying he will hoping you will go away ?
  • sourcratessourcrates Forumite, Board Guide
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    The correct and proper way to loan money to anyone is to set the terms beforehand.


    Before you lend the money make sure you agree exactly:

    How much you will lend
    The interest rate
    The term
    How much they will be expected to repay each month
    It is essential that you are both aware of all of these conditions before any money is exchanged.


    Drawing up a written agreement or contract which lists all the agreed terms of the loan makes it clear what you are agreeing to, and also provides you with a record of the agreement should there be any dispute.
    You and your friend should both sign it in the presence of independent witnesses.


    Remember this is 40k, its not an insignificant amount of money, it cannot be claimed through the small claims track, as it is over £5000, so an online money claim must be made, you will be charged a fee of 4.5% for submitting a claim online, this fee will be added to the amount you are claiming.


    Do they have that kind of money ?

    Did you obtain a signed and witnessed agreement beforehand ?

    If you didn’t, this makes things very difficult for you, and I’m sorry to say, shows a staggering level of ineptitude on your part, for lending such a massive amount of money, and not providing yourself with any insurance whatsoever.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to:
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    Any views expressed are mine and not the official line of MoneySavingExpert.com.
    "I don`t trust Bankers, I don`t trust Banks, and I don`t trust you.........Private Frazer".
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
  • Samuel12345Samuel12345 Forumite
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    Thanks for your replies, I won’t go into the circumstances and I’m not here to be judged, thanks.

    Yes he has family and they are aware. He won’t be disappearing. What is the online money claim process?
  • Ben8282Ben8282
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    You really have been rather foolish.
    When you take him to court expect him to come up with various excuses and possibly lies about what has occurred.
    Even if you get judgement against him, assuming he has not got this sort of money sitting in a bank account, you may still find it difficult to get any substantial amount of money out of him.
  • Samuel12345Samuel12345 Forumite
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    MoneySaving Newbie
    Basically I’m just wanting to know if it’s possible to get money from his wages sent to me. Let’s keep the personal insults out of this please.
  • edited 5 May 2019 at 8:12PM
    sourcratessourcrates Forumite, Board Guide
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    edited 5 May 2019 at 8:12PM
    Basically I’m just wanting to know if it’s possible to get money from his wages sent to me. Let’s keep the personal insults out of this please.

    No personal insults intended, anyway, as I said above, you need to start a claim at moneyclaim.com, but first you must send a pre-action letter, you will need to google this to follow the correct process.

    The pre-action letter gives the debtor a chance to settle terms with you, without the need to progress to court, it’s a part of the pre-action protocol of the civil procedure rules.

    If terms cannot be agreed, you would then file a claim online.

    You would then need to succeed in obtaining a county court judgement against your friend, he would probably ask to see evidence of the arrangement, it all depends if what you have is considered sufficient or not.

    If the court finds in his favour then it’s over for you, if they find in your favour, and if he agrees a payment plan, and sticks too it, all well and good, you can only obtain an attachment to his earnings if he fails to pay up.

    Should he fail to pay, you can apply to the court for a ATE, there will be a further cost for this though.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to:
    [email protected].
    Any views expressed are mine and not the official line of MoneySavingExpert.com.
    "I don`t trust Bankers, I don`t trust Banks, and I don`t trust you.........Private Frazer".
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
  • BermoniaBermonia Forumite
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    what you are seeking is an attachment of earning, but first things first you need to have a successful judgement against them which depending on what evidence you have may not be so straight forward - also for the attachment you would need to know exactly who they work for.
  • Ben8282Ben8282
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    Don't forget that even if you attempt an attachment of earnings he may submit a statement of affairs to the court to prove that he is unable to pay very much each month and you may have to make do with a very small amount of money each month for the next 100 years.
  • edited 5 May 2019 at 8:32PM
    SystemSystem Forumite
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    edited 5 May 2019 at 8:32PM
    £40,000 repaid at £500 pcm is 80 months or 6 years 8 months. Do you have anything that says when the date it had to be repaid in full is by? Do you have anything that says what would happen if monthly payments are missed?

    Without an end date then legally they have an open ended date as to when it has to be paid. Even if you take the time it would take to repay it at £500 a month then the end date is 6 years and 8 months from when the loan started, have you reached that yet?

    With a £40k loan which is out of the remit of the county court you need to make sure you have all your t's crossed and i's dotted otherwise it can be even easier to get thrown out on a technicality and I've listed just three possibilities for it being thrown out above, there are several more especially with a loan that was basically done as a conversation between two friends consisting basically of nothing more than:

    "I need £40k for XXX, can you lend me it?"
    "Yes but only for XXX. When can you give me it back?"
    "I can afford £500 a month is that ok?"
    "Yes, no problem."

    That would stand a snowballs chance in hell of standing up in a court if that is the sum total of how it went because it misses key factors required for it to be an enforceable loan between friends where there is an intention to create a legal relations. Loan agreements need to contain:

    Date of commencement
    Amount
    Reason for loan if it is for a specific purpose
    Length of loan
    Rate and total mount of interest if there is to be any applied.
    Total Repayable including above interest.
    Repayment terms
    END DATE
    Penalties arising from late payments or not repaying by due date.

    End date is in bold for a reason. No end date, they have until the end of eternity to repay it.

    Ultimately though for a few hundred in court fees quid he can walk into a county court and declare himself bankrupt then nobody is getting anything if he has no assets.
    Yes he has family and they are aware.
    Oh. Dear. Blabbing about debtors owing money to all and sundry, no doubt in order to put pressure on them to pay, tends to be looked on less than favourably. It could constitute harassment of a debtor which can be enough to get a debt nullified if it is severe enough.
  • DCFC79DCFC79 Forumite
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    Thanks for your replies, I won’t go into the circumstances and I’m not here to be judged, thanks.

    Yes he has family and they are aware. He won’t be disappearing. What is the online money claim process?

    Google small claims court.

    This explains it

    https://www.moneysavingexpert.com/reclaim/small-claims-court/#smallclaim
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