Loaned money to family member

[shywazz]

Not a easy thread to post really, my Sister/family were hours from a court appearance, wheres her family home was going to be taken from her, due to non payment of rent £1872.86 , i discussed with my partner, how we could assist her, although i was reluctant to do so, as i have helped her/family many times in the past, however upon this occassion, my partner decided she would help them and informed her and her husband that this time we would only help, in the understanding it was a LOAN and needed to be paid back, both of them agreed, so we drove to there home town from ours at speed, to get to the courts before the hearing, thankfully we got there in time, the court accepted the payment to clear the monies, and she was allowed to stay in the house.

 

My partner drew up a sort of agreement for them to sign, which there did, now after seeking the money back there have informed my partner that there wont be paying anything back as familys help each other and although this might sound bad, There said to her, take us to court and there will let us pay 50p per week back. ( there words not ours )

 

It has now been 8 months since my partner has been asking for this money, by letter/phone and e.mail and personnel visit, all to no avail.

 

I am reluctant to get involved, since i did not loan them the money, my partner did, the info i need, is can my partner now start any proceedings to reclaim this money from them, if so, whats the the proceedure on matters like this. I personnally know there are now in the postion to repay, there are just refusing to do so.

 

This matter has put another wedge between the family, but since it is my partner that is owed the money, i have decided to stand by her, and informed her that she must do what she must do to get the money back.

[Rich44]

You could commence small claims proceedings which you would if you have everything in writing probably win but would it get you anywhere?

 

Do they have a source of income or are they on benefits? If the latter then even if you win they could end up ordered to pay 50p per week.

 

You cant get money from people if they genuinely have not got it however if they have jobs then if you win they could be told to pay back a decent amount each week/month

[powelll]

If you did get a forthwith CCJ against them ( ie asking for the whole amount ) or an instalment amount that they could not or would not pay then once they default on a CCJ you can apply to the court for further enforcement.

 

For example, if they are employed you could apply for an attachment of earnings order to deduct money from their wages, or you could apply for bailiffs to be used.

 

I am of course not suggesting you do any of these simply stating the facts. You could even apply for something called an order for information which would force them to go to court to answer questions about their finances.

 

It really depends how you / your OH personally feel and how far you would want to take it. I have to say that IMO they are taking the p*** but that's just my take on it!

[buzby]

So it's tough-luck on your partner, because he used HIS money to bail out your sister? I would have thought that would have driven a wedge between you both, especially if - again - you support your sister's actions.

 

The document that was signed may not be worth much, as in any court action although of the best intentions, could be argued you were acting as unlicensed money lenders - so any action for recovery had better be reviewed carefully.

 

As the loan remains outstanding, and I'm sure there was no security taken for it, it is important to establish some form of regular repayment to cover capital and interest, so that it can be established the debt it admitted and payments are being made. If the money isn't repaid, then if the house was almost taken last time, it could be again, so it might be worthwhile to look at what assets they have and try and protect your partner from becoming a victim.

[Esio Trot]

The document that was signed may not be worth much, as in any court action although of the best intentions, could be argued you were acting as unlicensed money lenders - so any action for recovery had better be reviewed carefully.

 

We do loans, and are familiar with lending legislation.

 

A loan between individuals does not come under the Consumer Credit Act thus a Consumer Credit Licence is not required. If the lender was offering this as a service (and therefore a business) a licence would most definitely be required.

 

If the law was otherwise, thousands of deals between relations and/or friends would be unlawful.

 

Your sister is not worthy of such as yourself and OH. Go for a CCJ, as I doubt your relationship will not suffer any more than the lack of respect to you already shown by the borrower.

[joneshousehold]

You may have problems with a case I vaguely remember from when I studied law. I can't remember which one but it ruled that a contract between family members may not have an intention to create legal relations and so the contract is unenforceable. You will need to be aware of it so that you don't fall foul of it. If you search for contract law in google I think you may have some success. It was part of the basic blocks of creating a contract. You need an offer, acceptance, consideration (that's the money) and an intention to create a legal relationship.

 

My search on google has traced this site. If it doesn't help try searching again for 'contract law' there seemed to be a lot of hits when I tried

 

LawTeacher.net | Contract Law Study Guide and Resources

[BankFodder]

I don't think that there will be much of a problem rebutting the presumption against contractual intention between family members. It is an outdated idea and in any event you are talking about a decent sum of money and which has been witnessed in a written document.

Just sue in the small claims court and you will get your judgment.

Enforcing the judgment might be more difficult and it will help if you have a good knowledge of their financial circumstances.

 

I would suggest that after you get your judgment you then get a charging order on their property.

This doesn't mean that you would go ahead and force a sale but it would insure you in the future.

 

By the way it would have been wholly unlikely that the judge would have ordered the sale of a family home for only £1800 odd.

 

I think that there was some over-reaction.

[joneshousehold]

Thanks for clarifying that Bankfodder, it was just a thought from the depths of my memory and I didn't want the OP to get too far down the line without finding out.

Anyway, I hesitate to correct you but the OP said the original court hearing was for non-payment of rent so a charging order may not be an option. I suspect that the sister is well clued up when she says that they will offer say 50p and the court will agree to an order for that.

As ever I bow to your superior wisdom on this however

[bazak1]

families, what can you say ?

your OH of their own free will and generosity get your sister out of this mess and thats the way they are treated.

its a sticky mess, families, dont want to step on peoples toes in case everyone falls out etc, but hey, you guys were helping them, and now they can afford it, they should be making the first stop on payday to your house with a massive thank you !

[shywazz]

Thank you for all your views on this unsavaioury matter, yes indeed it is a sorry issue, helping family at there time of need and been told we are not getting our money back, after disscussing this matter further with my partner, we have taken the step to just take this as a lesson, and have come to the conclusion we won't be seeing that money back, whilst it is somewhat up-setting, we have decided to just distance ourselves from them, so that we don't fall into lending them money again, i have now paid my other half the money myself, as why should she be out of pocket, after all she works as i do and earns her own money, so felt only right she got the money back, so in a way it is me that my sister owes the money to, and i know her repaying is a no go area.

 

If i thought taking her to court etc would get the money back, i would, but knowing her for her ways, it would only harm the children she as got, and i wouldnt want that on my mind, we have peace of mind that we kept the home for them for now, but guess it won't be long before there get into the same postion again, only next time, there won't have us to bail them out. Again thanks for the info and we will think twice before helping people out in the future.

[bazak1]

i can well undrstand your views on not wanting to help people out in the future, but remember not everyones the same and some people would be genuinely indebted to you and your partner for the rest of their lives for what you did.

i would take the step of letting the rest of your family know about these events too, just in case they ever get ino this trouble again and some other poor unsuspecting family member gets stitched up.

put this one down to experience and move on.

[powelll]

put this one down to experience and move on.

 

I agree; I think you have taken a really pragmatic view of this and hopefully you won't be caught out again - but it was a great thing that you did