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How to collect on personal loan to a friend who disappeared?

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Hi guys,

 

So I made a personal loan to a friend for £2,500 on March 8, 2012. There was a contract for repayment in full after 2 weeks with no interest and was witnessed by a third party. This friend was moving cities and opening a new business, so he needed funds for housing/expenses etc. Repayment time comes and apparently his business has failed terribly. He's moved home and nowhere to be found. Won't answer my calls. Will respond via text sporadically saying he will pay in 3 days, then not respond for two weeks.

 

What do I do? In another thread it was suggested that I start with a tracing agent? Then what?

 

My concerns are:

1) I don't have his address or know where he is

2) I know he is dodging his ex-wife for child support, so will most likely not have many assets in his name

3) I've heard he has setup a new company, using his father's name as a Director and paying himself out through the company

what do i do?!?!?

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Oh dear, lending money to friends is usually the quickest way to lose them :(

 

I rather suspect you are going to have to put this down to experience - you could spend almost as much as you have loaned him, to find him. Then if he has no money and debts that take priority over yours, you might still not get your money back.


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Anything you do to trace him is likely to cost you more than he owes. Supposing you do trace him and it ends up in court and he is ordered to refund you, that still won't get you any money if he don't want to pay.

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You have six years in which to bring a court action against him. Personally I would bide my time because he is certain to reappear within that period.

 

Once you have obtained a CCJ you will then have a further six years in which to take enforcement action if he still doesn't pay. The cost of the action will be added to his debt.


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i was afraid you would say that... :shock::-(

 

waiting 6 years idea is good. what would i be waiting for? for him to be settled with a job, business and kid? he has a baby due with his gf in a few weeks. if they get married, will his new wife be liable for the funds as well?

 

p.s. the one thing that complicates this situation is that i'm an american citizen on a student visa and might not be staying in the country too long (year tops).

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You don't have to wait six years, it is the period of time in law in which you have to bring an action. He could reappear in a month or six months & as long as you have an address for him you can apply for a CCJ and serve the papers. Once you obtain a CCJ there are several options open. You can apply to a court for permission to enforce which can range from putting it the hands of a bailiff to having the monies deducted from his wages.


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Make sure you do not post anything which identifies you. Although we can remove certain things from the site unless it's done in a timely manner everything you post will appear in Google cache & we do not have any control over that.

 

Vir prudens non contra ventum mingit

 

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17 Port & Maritime Regiment RCT

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he is currently a director of the company he started (that is probably going bust), and the company has an official address registered with companies house. would i be able to apply for the CCJ at this address of his company?

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will his new wife be liable for the funds as well?
No.

would i be able to apply for the CCJ at this address of his company?
Yes.

Anthrax alert at debt collectors caused by box of doughnuts

 

Make sure you do not post anything which identifies you. Although we can remove certain things from the site unless it's done in a timely manner everything you post will appear in Google cache & we do not have any control over that.

 

Vir prudens non contra ventum mingit

 

[sIGPIC][/sIGPIC]

17 Port & Maritime Regiment RCT

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If you send it to his company's registered address he will not be able to apply for a CCJ to be set aside on the pretext that he never received the documents.

 

The chances are you will win the case by default because given his track record he won't be likely to try & defend. The cost of the application can be added to the amount you are claiming, also you can apply to the court for interest to be added at 8%.


Anthrax alert at debt collectors caused by box of doughnuts

 

Make sure you do not post anything which identifies you. Although we can remove certain things from the site unless it's done in a timely manner everything you post will appear in Google cache & we do not have any control over that.

 

Vir prudens non contra ventum mingit

 

[sIGPIC][/sIGPIC]

17 Port & Maritime Regiment RCT

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If you send it to his company's registered address he will not be able to apply for a CCJ to be set aside on the pretext that he never received the documents.

 

The chances are you will win the case by default because given his track record he won't be likely to try & defend. The cost of the application can be added to the amount you are claiming, also you can apply to the court for interest to be added at 8%.

 

I believe the address of his company is with the accountants, who look like they have not been paid. read on another thread about this company that they (the company/accountants/building) didn't sign for a letter posted to them and reposted it back saying 'not at this address'. can they (the company/accountants/building) do that?

 

So should i apply for the CCJ while the company is still alive now (most likely to be dissolved) or wait until he surfaces and apply for the CCJ at the new address?

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So should i apply for the CCJ while the company is still alive now (most likely to be dissolved) or wait until he surfaces and apply for the CCJ at the new address?

 

Whilst the company is still live & active the company's registered office is their legal address as registered with Companies House & as such any documents delivered there will be deemed as served, he won't be able to challenge that fact even if you win a court case by default.


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Make sure you do not post anything which identifies you. Although we can remove certain things from the site unless it's done in a timely manner everything you post will appear in Google cache & we do not have any control over that.

 

Vir prudens non contra ventum mingit

 

[sIGPIC][/sIGPIC]

17 Port & Maritime Regiment RCT

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Whilst the company is still live & active the company's registered office is their legal address as registered with Companies House & as such any documents delivered there will be deemed as served, he won't be able to challenge that fact even if you win a court case by default.
Great, thanks for the insights. So just for clarification, if I do win by default, this debt would have to be repaid at 8% for life unless he files insolvency?

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If you obtain a CCJ unless he pays the debt it never becomes Statute Barred but you only have six years to take any enforcement action after which it becomes subject to Sec.24 of the Limitations Act;

 

(1) An action shall not be brought upon any judgment after the expiration of six years from the date on which the judgment became enforceable.

 

(2) No arrears of interest in respect of any judgment debt shall be recovered after the expiration of six years from the date on which the interest became due.

 

If you fail to recover the monies within that period you would need to apply to a court again for permission to so but will be highly unlikely to succeed.

 

During those six years the CCJ will be recorded on the Trust site http://www.trustonline.org.uk/ and his credit file which will be highly detrimental to his credit rating.


Anthrax alert at debt collectors caused by box of doughnuts

 

Make sure you do not post anything which identifies you. Although we can remove certain things from the site unless it's done in a timely manner everything you post will appear in Google cache & we do not have any control over that.

 

Vir prudens non contra ventum mingit

 

[sIGPIC][/sIGPIC]

17 Port & Maritime Regiment RCT

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