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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3557
Experience:  Solicitors 2 years plus PQE
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Loans between family members

Resolved Question:

Hi - I'd like to clarify the legal situation regarding loans of money made to family members.

Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you for your question and welcome.

My name is XXXXX XXXXX I will assist you.

Can you provide me with any more information?

Is interest payable on the loans?

Kind regards

AJ
Customer: replied 2 years ago.

There are a number of issues at play. One is money owed which is being refused to be paid back. The other is that money freely given in the past is now being referred to as a loan. In the latter case interest is aking to be charged.

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

In the first scenario if money was loaned and it can be proved that it was a loan then the lender can take county court action to recover the money. You can start a money claim here www.mcol.gov.uk


In the second scenario, unless it was previously agreed interest was charged then you cannot charge interest retrospectively. If interest was charged it would bring into question whether the lender was entitled to lend the money under the consumer credit act. The lender could however potentially claim statutory interest under the County Courts Act but this would only apply from the date a judgment is given in the county court. The final issue here is if the money was paid without a requirement to repay then it is not a loan, the lender would have to prove that it was always intended that the money would be repaid.

I am happy to discuss this further.

Kind regards

AJ
Customer: replied 2 years ago.

Hi Aj. Thanks for your reply. Referring to the first part of your answer, what would qualify as proof that it was a loan?


 

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

Bank statements showing the loan was made. Any evidence of incremental repayments, any emails, any details of phone conversations if they are detailed and accurate enough.

Kind regards

AJ
Alex J., Solicitor
Category: Law
Satisfied Customers: 3557
Experience: Solicitors 2 years plus PQE
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