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Ben Jones
Ben Jones, UK Lawyer
Category: Law
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I am considering lending another individual £15,000.00 to be

Resolved Question:

I am considering lending another individual £15,000.00 to be repaid with interest in a fixed period. I will draw up an on line loan agreement that will contain penalties for default and security for failure to repay. This agreement is to be signed by both parties and a witness.
My question is; how secure is such an agreement and how would I go about enforcing the agreement if the borrower does default.
Submitted: 3 years ago.
Category: Law
Expert:  Ben Jones replied 3 years ago.

Ben Jones :

Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today.

Ben Jones :

What are the penalties you mention?

Customer:

He will pay £100.00 per day that he his late over the Term or the arrangement which is for one month

Ben Jones :

A loan agreement, whether formally drawn up, or just handwritten on a piece of paper can be equally binding on both parties. In fact, you do not even need anything in writing to have a legally binding agreement for this, although of course it would help if there was a document in place which detailed the terms of the agreement you and the borrower had entered into.


 


So it is entirely feasible for this agreement, once accepted and signed by both parties to become a legally binding document, which you may try and enforce in the event of a default by the borrower.


 


In terms of enforcement, this is where it may not be that easy to do and it would depend on the circumstances. You always have the county court available to pursue the money but even if you win your claim, if the other party refuses or cannot repay you, that is when you have to consider which enforcement option to try and use to take this further. The success of these enforcement options would always depend on the circumstances and the debtor’s position as some would be more effective in certain situations, others would not be appropriate. You have options such as bailiffs, charging orders, attachment of earnings orders and so on – plenty of options, it is just about establishing which is the best one to use at the time and based on the particular circumstances.

Customer:

I don't know why but I have been unable to rate this service despite repeated tries to select a face.

Ben Jones :

Sorry it's a bug we get sometimes, you can just type it here instead and we can process it later

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