Lent money to old friend

[Hayley1210]

Six years ago my husband lent money to a friend (£40000) in total, this was lent over a period of time including cheques and a lot of odd cash in 300's.. This person has paid back very ad hoc sometimes the agreed 200 a month sometimes 100 sometimes 50 at the moment nothing and is now claiming the loan was a gift and is not paying back anymore. I would say the amount outstanding is a good 34000. How can we prove it was a loan and not a gift. It was to help this person set up home (when my husband was on his own and much better off than he is now). There is no written agreement for this I could wring my husbands neck!!)

 

Relalise I've put this in wrong place but don't know how to move

[maroondevo52]

Hi Hayley.

 

I've moved this thread to a more appropriate Forum, hopefully you'll get some help shortly.

 

Regards.

 

Scott.

[citizenB]

Ouch, quickest way to lose a friend is this

 

Was everything dealt with verbally ? Is there any agreement to repay in writing at all ?

[Hayley1210]

Unfortunately there is no written agreement and everything verbally. The were a couple of texts but these are long deleted or on old phones. The only thing going for us is that he's paid back some which might prove it was a loan not a gift, but he's saying we've said the rest can be forgotten about (when in fact we are ourselves experiencing financial difficulties at present). I really don't know which way to go without incurring expense

[citizenB]

I am not really sure what you would be able to do. I have flagged your thread for further advice - I am sure someone will look in on you over the weekend.

[BankFodder]

I think that a court would start from the assumption that the money was intended to be a loan - and go from there - you start with an advantage.

Also, you have evidence of repayment of part of the loaned money and I would expect that the court would accept this as evidence that the entire sum ws intended to be repaid.

Finally if there has been a gift of £40k then the donee would have been required to declare this to tax. I expect that he won't have done so. The ocurt would be less than pleased and this would add to the weight of feeling that the money was intended to be repaid.

If you took this to court, I can't really see that you could lose.

 

However - clearly your ex-friends can be tricky. He could conceal assets or go bankrupt.

Before beginning any action, I would make sure that I knew about his assets, his house, his bank account details - anything. I owuld move to pace a restriction on his property and I believe that in some circumstances you can do that without letting the other side know as long as you give an undertaking that a court action was going to be started.

Maybe best to issue the claim and then try to apply the restriction just before serving the papers.

 

By the way, I'm short of a few quid at the mo, could you see your way to .... ?

Pay you back soon, promise.

[LaughingGirl]

Just checking...actually £40,000 and not £4000?

 

If you decided to go down the court route, it would be allocated to the multi-track which going from memory isn't cheap if it goes to a hearing - I'm pretty sure it's in the region of a thousand pounds. What sort of proof do you have that he was given the money, and that he has paid some of it back?

 

It's personal opinion only, but in terms of the money that was given to him in cash, it's going to be massively difficult to prove that it ever reached him let alone that he should be paying you back.

 

EDIT: I see Bankfodder has advised you before I hit reply - you would obviously be better listening to what he has to say on the subject than taking my word for anything!

Edited September 14, 2012 by LaughingGirl
More experienced advice already given!

[Hayley1210]

Bankfodder, trust me he has certainly learned his lesson, although I assume at the time he had faith in his friend's promise to repay. Might get some legal help on this one. Thank you for your helpful reply

[brokebutnotbeatn]

I don't agree that the court would start on the assumption that it was a loan. i would if it was provided as a lump sum but its been provided in dribs and drabs over the years; why would someone go on 'lending' money when it wasn't being paid back in a regular and formal fashion? It could be argued that you are changing your tune because you are in financial difficulties and regreting giving the money away. As a claimant in a court case the burden of proof is on you to prove it was a loan. the fact that you have nothing to substantiate the claim and the history shows that you continued to provide money in spite of NOT being paid back doesn't bode well. And the times money was given to you couuld be argued that your hubbie was short on cash that week so his mate gifted him some money back. Because the sum is substantial it would be best to arrange a meeting with this person and see if you can't agree a more amicable way forward. I wouldn't want to chance my arm with legal action on this but others more knowledgeable will be along I'm sure and Bankfodder is more knowledgeable than me for sure.

[brokebutnotbeatn]

oh yes I just saw - cash?! There is no way to prove this was given to the individual so at best the cheques are all you could go for.

[marmaris30]

A court case based on such piecemeal evidence and especially without any written agreement is going to cost you money with little guarantee of obtaining a judgement in your favour. It would only be worth risking if he has money tied up in property, against which you could obtain a Charging Order, or in bank accounts, against which you could obtain a Third Party Debt Order. If he is employed then you could get an Attachment of Earnings. I doubt bailiffs would achieve much. However before you could try any of those enforcement methods, you'd need that judgement.

[brokebutnotbeatn]

I just think the fact that you only have paper trail of cheque payments and NO agreement would make this unwinnable; you have no evidence AT ALL that the payments were not a gift and a court deals in facts not emotion. If I were the friend I would be saying of course I would have enetered into an agreeemnt to protect myself if the payments were loans; but we had a friendly agreement whereby we helped each other out on an ad hoc basis whenever the other needed it; gift payments from both sides. In fact the differing amounts and times would tend to support this argument. And who is to say that I would not be correct? The courts have to deal with facts and the fact is there is nothing to support the claim sothere is no case to answer.