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Some advice please- a loan went wrong

2

Comments

  • jonesMUFCforever
    jonesMUFCforever Posts: 28,898 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Tarambor wrote: »
    Was it a loan or an investment? If it was the latter then sorry but it is a case of tough luck. If it was the former then usually without a written contract a loan between friends and family is pretty much unenforceable but thankfully you have proof of payments and the messages which is the only thing that will save you.

    However as I said you need to be absolutely sure it was a loan and not an investment and that if you are claiming it is a loan that he has nothing that says anything about investing in this venture. If it is proven to be an investment they come with risk and part of that risk is you can lose all your money. That you cannot claim for.

    Ultimately though he is a gambler and has no money. Whilst you may win a judgement against him this doesn't guarantee you'll see your money and he is unlikely to have sufficient assets to cover it either. And if he declares bankrupt then all previous debts are uncollectable.

    Personally I reckon you'll never see the money again and chasing for it other than getting the initial CCJ is throwing good money after bad so you should prepare yourself for that.

    Now going back to you, you of course have been declaring the interest you've been receiving to HRMC so it can be taxed appropriately? If not then that is tax evasion so before talking about people being slippery one may want to take a look at one's self.

    Is the interest more than £1000 per tax year?
    If not he does not have to pay tax on it.
  • System
    System Posts: 178,376 Community Admin
    10,000 Posts Photogenic Name Dropper
    jonesMUFCforever wrote: »
    Is the interest more than £1000 per tax year?
    If not he does not have to pay tax on it.

    Err no. First of all that is only for savings. From the HMRC Fact Sheet:
    Savings income includes account interest from:
    bank and building society accounts
    accounts with providers like credit unions or National Savings and Investments

    It also includes:
    interest distributions (but not dividend distributions) from authorised unit trusts, open-ended investment companies and investment trusts
    income from government or company bonds
    most types of purchased life annuity payments

    None of which it is because he was acting as a lender therefore the interest is taxable income.
    This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com
  • Glenn_Stubberfield
    Glenn_Stubberfield Posts: 16 Forumite
    If I were to claim back only the actual amount owed (£7100) minus all interest would that not just be a loan?

    I definitely 'loaned' him the money but I admit it might seem blurry where this becomes an investment or a loan, something I never thought of.

    Also if I were to win a judgement and he continued to not pay surely I could request an Attachment of Earnings Order?

    I have mentioned previously more than once that he is in full time employment...

    Cheers
  • Arleen
    Arleen Posts: 1,164 Forumite
    1,000 Posts Combo Breaker
    Glenn_Stubberfield wrote: »
    If I were to claim back only the actual amount owed (£7100) minus all interest would that not just be a loan?

    I definitely 'loaned' him the money but I admit it might seem blurry where this becomes an investment or a loan, something I never thought of.

    Also if I were to win a judgement and he continued to not pay surely I could request an Attachment of Earnings Order?

    I have mentioned previously more than once that he is in full time employment...

    Cheers
    Sure you can, but when that hits him he has many options to weasel out of the debts like DRO or bankrupcy, whichever may be applicable.

    Assuming that he has actual money left out of his salary every month in the first place, because if his head is justa above drowning, then he can't repay you anything.
  • Glenn_Stubberfield
    Glenn_Stubberfield Posts: 16 Forumite
    Which is why I've invited him for months to actually just talk to me so we both know where we stand. He is constantly avoiding that though.
  • StopIt
    StopIt Posts: 1,470 Forumite
    If this guy is a gambling addict there's a high chance he owes more than just you.


    If so, even a court would not help much. If he has no spare income because of other debts, he will either be ordered to pay a fraction of the balance (No, not near £200pm), or be ordered to pay Forthwith under the expectation that he'll default and likely file for a form of insolvency.


    Either way, you're not getting the money back unless if he decides has can pay, which is unlikely because a problem gambler will always put money on the horses before putting them back to paying debt.

    In debt and looking for help? Look here for the MSE Debt Help Guide.
    Also, If you need any free and impartial debt advice, the National Debtline, Stepchange, and the CAB can help.
  • BrassicWoman
    BrassicWoman Posts: 3,218 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Mortgage-free Glee!
    Glenn_Stubberfield wrote: »

    I definitely 'loaned' him the money but I admit it might seem blurry where this becomes an investment or a loan, something I never thought of.



    I think that tells us that you don't have enough evidence to support a court case.
    2021 GC £1365.71/ £2400
  • Arleen
    Arleen Posts: 1,164 Forumite
    1,000 Posts Combo Breaker
    Glenn_Stubberfield wrote: »
    Which is why I've invited him for months to actually just talk to me so we both know where we stand. He is constantly avoiding that though.
    Which means that he is done with you. You have a choice of just dumping this and moving on, or trying to send more money as a last ditch attempt to collect. Make your choice, though chances of collecting anything are slim - that is why companies buying the debt of private individuals do it for, quite literally, cents on a dollar.
  • Glenn_Stubberfield
    Glenn_Stubberfield Posts: 16 Forumite
    Thank you defaultuser,

    That was the plan going forward, to try and collect the £7100 in small installments.
    I am prepared to accept that without going to court.
    I am hoping he will get back in touch at some point soon but we'll see...

    Thanks again

    Glenn
  • Glenn_Stubberfield
    Glenn_Stubberfield Posts: 16 Forumite
    edited 11 September 2017 at 1:37PM
    To StopIt:

    Yeah I agree with that.
    I don't know if he's done this to others or if and how much debt he owes out.
    I guess if it went to court and it turned out he owed multiple thousands to to others as well, the court might throw the case out because he just can't afford it?

    He was talking about holidays not that long back though and that does not come across someone who is just above water...
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