Family Business Loan - Signed Promissory Note - SD Failed - Now a Claimform

[rippedoff15]

Hi All

 

Last year we were lent some mony from a family member for my business,

but following an illness which left me unable to work

 

 

i had to file for Bankrucpty which was completed in Feb 09,

the OR has now written to all my creditors informing them that I am going to be issued an early discharge.

 

 

My family, which we still owe outstanding funds too, has asked me to sign a promissary note which confirms that i will repay them in the future, they are adding interest as well.

 

 

At present I am married ( only just ) and not sure if it's the right thing to sign

 

Questions

 

1, I am currently BR - by signing a promissary note i may be breaking the law?

 

2, By signing now and in the future split up from my wife I am still in debt by £21k

 

3, If i refuse to sign now the family member will kick off and this will end all relationships

 

At present I am just having sleepless night regarding this matter and not sure which way to turn can anyone help in this matter

 

cheers:mad:

[42man]

If this was me I would NOT sign anything like this....

..and if you are bankrupt I don't think you can sign anything that commits you to an unsecured debt that has been possibly incorporated into your BR,

 

 

and on a legal basis, they would struggle to enforce anything on you pre bankruptcy.

[chauvesouris]

If you have any legal creditors, you are obliged by law to advise the OR of them. That is one of the fundamentals of bankruptcy - full disclosure of the debt.

 

However, family relationships are usually carried out outside of the common law of contract etc. It would be very difficult for you to sign anything and it to have any legal weight because if it is an enforceable debt it should have been declared, and if it's not enforceable then that's that.

 

I don't think it would be right for you to sign from a legal point of view.

 

You also state that you are "only just" married - I take it you mean it is not a strong marriage and may end soon? In which case, the last thing on earth you should be considering is signing anything that commits you to pay anybody anything in the event of your separation/divorce (you will find that is painful and costly enough already - without adding to it).

 

Of course, if you did sign anything and they later tried to rely on it, you might be able to use the defence that you signed under duress (or undue influence). Clearly you are only considering signing because of the pressure they are putting you under - there is nothing else in it for you (unless you think it will save your marriage).

 

My final thought though is that, as this is family, presumably you will pay them off if you can (and they will be happy), and if you can't then it doesn't really make any difference whether they've got a note from you?

[rippedoff15]

Hi,

 

Can anyone help, i borrowed £20k from a family member for my business back in 2008 sadly the company folded and i was made BR we lost everthing cars house the lot, the family member made us sign a promissory note stating that we will replay the money.

 

Everything has been going well we have been paying every month £250.00 and so far we have repaid just over £6500, the promissory note did not state how much or any timescales, we make payments of £250 is as much as we can pay, last night the family member emailed statement ( no longer talking ) which all the payment and they are charging interest well daily at 8% . On christmas eve i was laid off thus unable to make payments and the family member is getting nasty, what can we do to sort this mess

 

can anyone help as this will get even more nasty

 

cheers

[debbbbsy]

Quote

which all the payment and they are charging interest well daily at 8%

 

When you borrowed the money, did you make it a formal arrangement ?

I don't think he can apply interest.

 

You have to ask, what is more important, your family or this person. Even if you put your own welfare at risk in order to pay this, will it be appreciated. Will it mend this breakdown ?

More help will come.

 

Take alook at this thread.County Court action by ex friend

 

Debs

[AndyOrch]

A promissory note, which is a written promise that you – the ‘maker’ - will pay a fixed sum of money by way of instalments on specified dates. The maker can be a limited company, partnership or individual, and the payee may be either a named person or the bearer of the note on the date it becomes payable. The note allows for interest to be paid on the loan.

[macie]

Did you go bankrupt?

 

If so, was the loan made before you went bankrupt? Was it included in your statement of affairs?

[Leakie]

Adding to what Macie has stated

If this note was not included in your BR , the OR will not be happy if they find out,

and could cause you problems,

if it was declared then the family member can not do anything about it.

[rippedoff15]

Well getting to the end of 2013.

So far we have repaid just over £10k.

 

 

the family member has sent statement confirming payments and they are charging interest based on 8% per day.

 

 

the debt is over £17k and getting higher.

Their seems no end to this nightmare,

not sure what we can do now,

we have not spoken for 5 years and they are now sending texts to our children which is causing more issues.

[AndyOrch]

Thread moved to General Legal Issues.

 

 

PS it should be 8% per annum not day.

 

 

Regards

 

 

Andy

[rippedoff15]

The debt was £20k which was paid to my old business which went bust,

the funds were in fact not paid directly to me or my wife,

 

 

they keep stating it was a personal loan not business,

and keep demanding interest and more payments.

 

 

Now our children are getting older they are starting to make contact with them via facebook ,texting, which is adding more pressure

 

The statement quotes the following :

 

(Loan at 8% Effective Annual Interest, Interest Charged Daily)

 

We have not spoken for 5 years since the business went bust and their is no sign this will end

[steampowered]

If the 'debt' was incurred before the bankruptcy I don't think you should be paying back anything. The whole point of bankruptcy is that your debts get wiped and you start over again. I don't think a piece of paper signed to say that you will repay the debt after being discharged from bankruptcy has any legal status.

[rippedoff15]

Well how a family member is stooping so low now,

they have written to my mother in law who knows all about the debt,

stating now , no telling her, to change her will, removing my wife from any future funds and pay them instead.

The shock is my mother in law is 76 in perfect health.

 

Also if she refuses to amend the will they will start court action against my wife,

[SuperVillain]

The debt was £20k which was paid to my old business which went bust, the funds were in fact not paid directly to me or my wife, they keep stating it was a personal loan not business,

 

Was it a limited company or were you and your wife in a partnership (or indeed were you operating as a sole trader)?

 

I'm presuming the business is no longer trading, is that correct?

[rippedoff15]

Hi All,

The funds were paid directly to the company which was Ltd,

my wife was not a director and had nothing to do with the firm.

 

 

After the firm went bust i myself was made bankrupt back in 2009,

and discharged 6 months later and now working employed and rebuilding again.

 

During 2009 sadly i had a breakdown which was very hard at the time,

and during the time they got me and my wife to sign A promissory note stating we will repay the debt and they are charging 8% pa.

 

we have and still pay each month 125.00 but they now want more,

thus putting pressure on our mother in law to get a will changed.

 

Now feel like telling them to get stuffed !!!

[reallymadwoman]

I think this probably now amounts to harassment.

 

From what you have written you could not possibly make the relationship between you and this family member any worse so I think you should collect all the evidence - letters, texts, screen dumps of Facebook comments etc - and go to the police. No one is entitled to put you under this sort of pressure no matter what you might owe them.

 

Do not let the police fob you off by saying it's a civil matter as it's about a debt - you are complaining about their intimidating and harassing behaviour. Insist on speaking to a senior officer if you have to.

[steampowered]

For the reasons in post #8, at least from a legal perspective, I don't think you should be paying a penny let alone 125 a month. The whole point of a bankruptcy is that it wipes away your debts. In your position I would cease all payment and invite them to take me to court, informing them that any court proceedings would of course be defended on the basis that the debt was dealt with as part of the bankruptcy. Obviously your relationship with them would end but sounds like it has alerady.

 

I can't really comment on the family stuff. Using and abusing family relationships in this way is uncommon in the UK but common in many other cultures globally. Your mother-in-law is entitled to do whatever she wants with her will. We are talking about quite a lot of money that has gone down the drain so it is understandable that they will do anything to get the money back.

 

The aspect of this which is unacceptable is contacting your children. This is the aspect I would threaten to escalate to the police and/or bring a civil claim for harassment if it continues.

[SuperVillain]

What happened when your limited company went bust? Was the Official Receiver involved? Did you/the OR inform all creditors (including the family members who gave you the loan) that the company was insolvent? Is the company still active on companies house?

 

They're trying to circumvent the liquidation by claiming it was a personal loan, but if they were "officially" one of the insolvent company's creditors then this strengthens your argument that it was a loan to the business - along with the initial loan being paid to the business.

 

Either way the above points about bankruptcy and harassment are good ones.

 

Whether its the company's insolvency or your own bankruptcy you shouldn't be paying anything.

[rippedoff15]

The funds were paid into company account,

the debt was listed with the official receiver

and all creditors were informed etc,

i myself was made bankrupt writing off all debts including personal debt.

 

Due to the fact the funds were paid to the business they were not listed in my personal bankruptcy.

 

 

We have been repaying every month but they keep adding interest,

this week we found out they are putting pressure on my wife's mother to change her will to make sure they get the full amount including interest which is very underhand.

 

After speaking to the rest of the family they are all discussed the way they are acting.

My mother in law has refused to change her will, and the comment was they will issue court action!!!!!!

[steampowered]

Ultimately you have the power in this relationship since it doesn't sound like they would be able to pursue the debt through the courts. I think you should be putting yourself in the driving seat here. Based on what you have posted it sounds like any repayments are entirely voluntary.

[stu007]

Also if this debt was part of your bankruptcy I would be informing the Trustee/Official Reciever of this issue especially if they are creditors they should be approaching the Trustee/Official Reciever not you.

 

I would not sign anything and refer them to the Trustee/Official Reciever dealing with your Bankruptcy.

[rippedoff15]

Well been told as they paid the funds direct to the business,

and we have been paying them directly

this is wrong

 

 

we should have paid funds to the receivers,

and they could ask them for all monies which they have had ie the £10k

is this correct.?

[rippedoff15]

Well its been a long time since the family member sent any form of request,

today we found out they are still putting pressure on my mother in law to change a will.

 

 

Following my bankruptcy and the business closed in 2009 which they were a creditor.

They still state it was a personal loan not business and even now state they intend to seek a court order against my wife.

 

Well also today my mother in-law has given all her child £5000.00 gift,

and no shock to find the family member demanding we give it all to them,

they have sent a statement as follows

 

Personal loan £20,000.00

Outstanding £18,000.00

 

yet over the last 3 years we have repaid £11,000.00 appox,

but they are charging 8% per year charged at a daily rate.

 

 

just feel like file another bankruptcy,

for both myself and my wife,

and stop making the monthly payment of £125.00

 

Anybody got the thoughts in how to bring this issue to a close

,

[rippedoff15]

Well today we have had a letter from a solicitor informing myself & my wife that they are now intending to recover the debt,

 

 

he is asking for a mediation meeting as we are not speaking ( 6 years now ) not realistic ,

 

 

The other party paid to my business £20k which was paid directly to the business bank account

the business went into administration.

 

 

After the business went bust i myself following an illness was declared bankrupt and lost everything including our house.

 

 

They demand we sign a promissory note for the debt,

to date we have repaid over £11k

however as they are adding interest the debt claimed is now back to £20k

 

I have been repaying every month £125.00 which is all we can afford

and now they have instructed a solicitor,

therefore we are now at a point and totally unsure what we action we can take apart from filing joint bankruptcy.

 

Can anybody help in this matter

[steampowered]

I would write a letter to the solicitor explaining your position.

 

 

As I understand it, the three key points are that (1) the loan was taken out by your company and not by you personally, (2) the loan pre-dated your bankruptcy and (3) your wife had no involvement with the debt.

 

I don't think you need to do anything else. If points 2 and 3 above are true I can't see how they have any legal basis to claim for the debt.

 

If they want to bring court action against you, you would have an opportunity to file a Defence to that action and would be able to explain that to the judge at a short court hearing. This is nothing to be afraid of.

 

I don't think there is any point declaring bankruptcy. You should not consider that unless there is a court order against you. It doesn't sound like a fresh bankruptcy would stop them bothering you anyway.