Lending money to friends & family

poppyjay

cant you go to the police about the phone as he tookcredit out in your name with out your knowledge

brickhouse

An eye-opening thread. It is a great pity that more often than not, borrowing is accompanied with tears. But there are the odd occasion where both sides are honourable. I have lent money to friends / family in the past and had it back. There have also been the occasions when I have had to kiss the money good-bye.

My brother is going to lend me a substantial amount of money, short term, which I shall repay when I have sold my home which I am about to put on the market.

There is more than sufficient equity in the property so I have no concerns about my ability to pay off the loan. However, in the interim, I want him to have peace of mind and want to know the best way to achieve this. I would also sleep better knowing that if anything happens to me, he is not suddenly out of pocket and struggling to prove that he has that right to that amount of money before my estate is disbursed.

What kind of document or agreement would be legally binding, something that he could either use as a claim against my estate in case anything happens to me before the sale is completed, or as a claim against me in case I decide to do a runner.

I am keen on this from bitter experience, after being on the receiving end of an ex that borrowed approximately £15,000 from me. I had thought I was protected as he wrote me IOU's for what he borrowed. But when he did a runner, I was told by the police that the paper he gave me acknowledging what he owed was not worth the paper it was written on.

So, I need something bullet-proof for my brother's protection.

Someone has suggested a promisory note. How does one go about obtaining one. The other option I had thought of was to write this into my will (and of course amend the will once the loan was repaid.

Once the house was actually on the market, I would instruct the solicitor handling the sale to disperse the funds accordingly to my brother which should conclude the matter, if all goes smoothly.

Any advice, link to a formal loan template, or how to get a piece of paper to be more than a piece of paper, would be greatly appreciated.

BrickHouse

scara

thanks ceegee the moral of the story is don't lend money out. I've been asked since this saga began and I politely refuse regardless of who is asking or what their situation is.

poppyjay I rang my local costabulary today and was told that it is a civil case and they cannot prosecute someone for using my identity details even if they used my details to obtain goods and services. How's that for the brilliance of the legal/justice system. I will post this question on the cag website in the hope that one of the legal eagles over there might offer an alternative course of action.

what I have done is to pass these peoples new address to their numerous creditors who they have been dodging during the last few years. It won't get me my money back but it makes me feel better knowing I'll be causing them a few hassles.

eatmyfish

You have comitted fruad by allowing your bank account to be used by another person.I suggest you remain real quiet...

MABLE

ceegee wrote: »

That is absolutely sickening, it really is. We have to be so very, very careful about lending money to others. There is a sticky thread about this very thing......full of similar horror stories (including mine!)

Just try your utmost to put it behind you. Remember it, if anyone asks you for a loan in the future.

I have only lent money to two so called friends in my life and it has gone badley wrong and they dont even speak anymore. The first friend did pay me back but the cheque bounced and the second disappeared but reappeared later. However that all happened a long time ago. I now direct anyone in need of cash to approach their bank.

hazzie123

eatmyfish wrote: »

You have comitted fruad by allowing your bank account to be used by another person.I suggest you remain real quiet...

Would whispering be ok?

missfendiuk

LOAN AGREEMENT

THIS LOAN AGREEMENT (the “Agreement”) is entered into effective as of __________________________________________________ ___________________,

Between: Joanne Bloggs of

__________________________________________________ _____________; and

Princess Bloggs

of __________________________________________________
(Collectively and individually “the borrower”)



Justin Blag

AND

Joe Blag

(Collectively and individually “the lender”)

of

dustbin house

Joessete Bloggetter

IN CONSIDERATION OF the lender loaning certain monies (the “loan”) to the Borrower, and the Borrower repaying the Loan to the Lender, both parties agree to keep, perform and fulfil the promises and conditions set out in this Agreement:

Loan Amount & Interest
1.The Lender promises to loan GBP 000(£) to the Borrower and the Borrower promises to repay this principal amount to the Lender, at such address as may be provided in writing, without interest payable on the unpaid principal (if paid back within three (3) months).
2.The Individual borrowers are jointly and severally liable to the Lender for the full principal amount.

Term and Termination. The initial term of this Agreement will be for ____ months, from the effective date of this Agreement. Either party may terminate this Agreement at any time before its initial term is completed, for any reason or for no reason at all, provided that at least __ days’ advance written notice of termination is given to the non-terminating party by the terminating party and that the lending party must repay full loaned amount with terminating.

Mutual Understanding. Each party has read this entire Agreement, fully understands the contents hereof, has had the opportunity to obtain independent advice as to its legal effect, and is under no duress or obligation of any kind to execute it. This Agreement reflects the mutual understanding of the parties with respect to all subject matter addressed herein and will be construed accordingly.

Notice. Except as expressly provided to the contrary herein, any notice required or permitted under this Agreement will be deemed sufficiently given if in writing and personally delivered, transmitted by email, or sent by certified mail to the party at the address set forth beneath its signature below or at such other address as the party may subsequently designate.

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date first above written.

Borrower:

Signature:________________________

Signature:________________________

Witnessed by: Nosy Parker of ___________address place here____________________________


Address [ ]
[ ]
[ ]

Email:


Lender:


Signature:________________________

Signature:________________________


Witnessed By: Nosy Parker of _______________________________________
on ________________

Address of witness

missfendiuk

Well, after drafting this loan template (yes, i am in law school) i decided to inform the person that put my hubby and i in the uncomfortable postion of asking for a £1.500 loan to come and pick up the cheque.

I also mentioned that I have a loan agreement for them to sign!!!

This was two days ago, since then they have not phoned or contacted us!!! so this can work to put someone off borrowing money from you!!

savvy

Thanks missfendiuk, that's very useful. I've merged the 2 posts you've made of this, that way we've got a one stop shop for it - I'll also put a link to it, in the useful links thread to enable people to find it easily.
savvy

loveandlight

As this is a very long thread I haven't had time to read it all. Just wanted to say that maybe the secret of getting friends not to borrow from you is to do what one of my friends did. She lent us money when we were left penniless after being defrauded and losing all our life savings and she then took advantage of us by lying to us, demanding to know our whereabouts at all times and emotionally blackmailing us etc. Then when we did pay her back in full immediately we got our own money back, she tried to claim that we owed more than what we did. Fortunately I had kept a record of everything but she hadn't. Even now several years later she still offers to lend us money, but no fear, I would never borrow money off her or anyone else again, apart from the bank.

I, on the other hand, lent another friend a series of small amounts making up a total of £750 and I said she could pay me back when she got back on her feet. ( She had been made redundant and ended up losing her house etc). I never got repaid. I am a great believer in don't lend what you can't afford to lose. We have lost touch now but I don't regret lending her the money, as I had already written it off in my own mind anyway.