Second charge on property to a deceased friend

getmore4less

Sea_Shell said:

getmore4less said:

springmagpie said:

Very little records, they aren't the record keeping types. It was all done in cash, and cars!
Yeah that's what we are fearing. My uncle certainly won't have understood the interest terms.

Organised enough at the time to get the charge put on so there were some records.
Any more details on the terms of the debt.

Maybe the friend was the canny one!  Protecting their position @ 20% interest!!!

It would be in his interest to NOT have received any repayments!!   

1991 equivalent to base rates was in the 10%-14% range so not as spectacularly high as current rate might suggest.

getmore4less

xylophone said:

We can go back and get bank statements to show the cash withdrawals and show the transfer for cars from my uncle to his friend.

Much better than nothing!

that is useful as if there was no other consideration for the cars that could be implied as the transfer were to pay off a debt and the only one recorded (so far) is the charge.

being more optimistic 
It may be that the friend did keep records and that because their administrators could see the debt had been paid off they just ignored it, as reasonable to assume there was nothing for them to do.

Sea_Shell

I guess now you know HOW to get the charge removed, the focus now shifts to the Executor of the friends estate and their legal duties.    It would seem that the debt remains "live" until formally discharged.

Legally, they have to administer the estate in the best interests of the beneficiaries, without undervaluing the estate to evade paying IHT.     They may consult their own solicitor before doing anything.

So, as Getmore4less said, it may be (fingers crossed) that they DID satisfy themselves that the debt had been repaid, but they just didn't realise that they needed to officially remove the charge.    They could sign the discharge form and that would be the end of it.

You mention Uncle is able to go back through his statements and find his cash withdrawals, and he knows the dates any cars changed hands.    How close does he come to the £12,000 and when was the last payment made.    As basically, in the first year alone, the loan would have accrued £2400 in interest!!!    I'm assuming if he needed to borrow the money, he didn't have it available for a little while, so it may of been a couple of years before he started making repayments?   If not for 2 years, he would have then owed £17,280.

However, if there is no proof of full repayment....can they legally "negotiate" a settlement on behalf of the estate, if this is below the amount they COULD pursue your Uncle for.    Which, as we've shown, would be a silly amount of money, if there is no proof of repayment.

Lets hope they don't either cotton onto the wider picture here, or get greedy, otherwise I think your Uncle could have a problem!


I wonder what responses the Executor would get here, if they posted the situation as seen from their perspective.

Keep_pedalling

This is an interesting case. From reading around the internet, it would appear that secured loans from family and friends are treated in law as regulated mortgage contracts.

https://www.morrlaw.com/corporate-finance-law/secured-loans-family-members/

If that is the case it is unlikely any outstanding interest as the lender failed to meet their obligations to do things like provide annual statements. Before approaching the executor it might be worth speaking to National Debtline for some expert advice.

https://www.nationaldebtline.org/

Sea_Shell

Keep_pedalling said:

This is an interesting case. From reading around the internet, it would appear that secured loans from family and friends are treated in law as regulated mortgage contracts.

https://www.morrlaw.com/corporate-finance-law/secured-loans-family-members/

If that is the case it is unlikely any outstanding interest as the lender failed to meat their obligations to do things like provide annual statements. Before approaching the executor it might be worth speaking to National Debtline for some expert advice.

https://www.nationaldebtline.org/

I wondered this.  Would it be deemed to be unfair contract terms if the loan was never statemented or the rate reviewed or revised.

An "official" lender wouldn't get away with it.    That's what made me initially think it could be unenforceable.

Sea_Shell

I've just been reminded of this thread.

Any updates OP?  How's it going?

Sea_Shell

@springmagpie

Did this ever get resolved?  


(another thread reminded me of yours)