Small Claims Court - for unpaid loan, how do I add interest?

JustPeachie

Hi, sorry if this is the wrong category it seemed the best fit I could find.

Re a loan made to a family member several years ago.  They refused to make any repayments claiming to have no money.  They have now come into a significant amount of money so I intend claiming for immediate payment of the full amount via small claims court.

Can anyone advise how much interest I can add please?

PRAISETHESUN

What does the loan agreement you made with them specify about interest? Also, how old is this loan? "Several years" could put it outside the statutory limits for being able to enforce it.

EarthBoy

Unless they agreed to pay interest when you lent them the money, I don't see how you can claim any.

fatbelly

You can add whatever the contract said

JustPeachie

Thanks. It can be chased because there has been ongoing written correspondence about it and this is recent.

No, interest was not discussed so I take from your comments that this cannot be added. I thought it may be as they had refused in writing to repay it.

ChirpyChicken

And if you know their bank details and they don't pay you can apply for a third party debt order if you get judgment 

PRAISETHESUN

JustPeachie said:

Thanks. It can be chased because there has been ongoing written correspondence about it and this is recent.

No, interest was not discussed so I take from your comments that this cannot be added. I thought it may be as they had refused in writing to repay it.

Ultimately to prove your case in court you'll need to have evidence of any agreement that has been made, and that the agreement has been broken. Without any evidence regarding interest (interest free-loans can and do exist), you'll be hard pressed to prove that any is due as it'll become a he-said-she-said kind of affair. I'd just focus on getting the outstanding balance repaid and take the rest on the chin as a learning experience to not mix money and family again in future. Also keep in mind that any interest due if it was ever paid would be taxable as income, which would need to be declared to HMRC. Easier to let it slide I think.

born_again

TBH, if they are claiming no money. What are you hoping court to do?
If they have none, then court can not force them to pay..
You could/will end up throwing more money at this for no return.

Charging interest could class you as a lender who have to be regulated. 

As the saying goes, never lend to family or friends. Unless you can afford to lose the money.

eskbanker

born_again said:

TBH, if they are claiming no money. What are you hoping court to do?
If they have none, then court can not force them to pay..
You could/will end up throwing more money at this for no return.

They do have money now:

JustPeachie said:

They refused to make any repayments claiming to have no money.  They have now come into a significant amount of money so I intend claiming for immediate payment of the full amount via small claims court.

danny13579

What does the loan agreement say? Is it in writing and signed by both parties? When was the loan made? When was it meant to be repaid by? Was there a schedule in the contract for repayments to be made? What does the written correspondence between you say? Do they admit a loan was made and they aren't repaying it?

JustPeachie

PRAISETHESUN said:

JustPeachie said:

Thanks. It can be chased because there has been ongoing written correspondence about it and this is recent.

No, interest was not discussed so I take from your comments that this cannot be added. I thought it may be as they had refused in writing to repay it.

Ultimately to prove your case in court you'll need to have evidence of any agreement that has been made, and that the agreement has been broken. Without any evidence regarding interest (interest free-loans can and do exist), you'll be hard pressed to prove that any is due as it'll become a he-said-she-said kind of affair. I'd just focus on getting the outstanding balance repaid and take the rest on the chin as a learning experience to not mix money and family again in future. Also keep in mind that any interest due if it was ever paid would be taxable as income, which would need to be declared to HMRC. Easier to let it slide I think.

You make very good points, thank you that helps give focus, I would be happy just to get the loaned sum back.  (I actually had thought the Court would expect me to add interest hence me trying to work out a figure).

This was all done on trust (I know I know), obviously it's a bitter lesson but I did not foresee this happening at all.

There was nothing in writing however there is a lot of correspondence between us and also via three other sets of third-parties (for example having to account for the money to an accountant) and in all of these it is referred to as a loan and who it is from.

There is also a written denial of receiving the money which I hope will go against them in Court as there is an obvious paper trail showing the money going into their account.

I am praying anyway that that will be enough.