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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3695
Experience:  Solicitors 2 years plus PQE
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I invested £100000 with a lady my late husband worked for

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I invested £100'000 with a lady my late husband worked for and trusted in 2011. She said it was to build houses on land she already owned, she would pay me £1000 interest and give the balance back when the houses were built. We signed a piece of paper stating this and that it was for a year but could be rolled over. I can not find this paper but did give her a cheque. The houses never got built but she has paid the interest every month. About 18 months ago I asked her for my money back, she said she had to sell one of her properties and she would pay me, I waited 6 months until the property was sold and then she said something had come up and she could only give me £15'000 she continued to pay me £850 per month interest. I recently wanted to buy a business and again asked for my money back which she said would be ok so I proceeded, now I need the money and she is once again saying she needs to sell a property to get it. I know now this was a foolish thing to do. Can I put a charge on her property or anything else to guarantee I get my money back.
Submitted: 3 years ago.
Category: Law
Expert:  Alex J. replied 3 years ago.

Alex J. :

Hi Thank you for your question and welcome.

Alex J. :

My name is XXXXX XXXXX I will assist you. If she acknowledges the debt, would she agree to give you a charge willingly?

Customer: I don't know AJ she thinks she is doing me a favor by paying me the £850 per month interest, which has been very useful, I'm just panicking as she is in her 70's and there is no sign of the initial investment being returned and her promises of paying me back when properties are sold are not very reassuring, II would like to get the money back now as I have found a business to buy which would be a great opportunity for me but that's not very likely so my feeling is that if anything should happen to her my money is not protected. She will probably be very insulted if I was to ask her.
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Expert:  Alex J. replied 3 years ago.
Hi,

Thank you.

My apologies there was a problem with the chat - so I have switched to Question and Answer mode. I will still be here to respond but it wont be in real time.

Normally in this circumstance what you would ideally do is sign a "Deed of Forbearance" - this means you agree to forbear on calling in the debt in consideration of her giving you a charge over the property. Her agreeing to the charge is fairly crucial because the only other way to get the charge would be sue her.

I think it is perfectly acceptable that if you need the money to be repaid and she cannot repay it, then the very least she should do is give you security (i.e a charge).

The interest does seem quite high, basically 10% per annum. What about if she wont agree to the charge offering to reduce these payments in return for the charge?

Kind regards

AJ
Customer: replied 3 years ago.
If she does agree to a charge then do I only get the money back when she dies?
Expert:  Alex J. replied 3 years ago.
Hi,

Thank you.

If she agrees to the charge then you will be a secured creditor. Therefore you will get the money back, as long as there is sufficient equity in her property that the charge is over, if she dies goes bankrupt or even tries to sell the property without telling you.

If you are going to get her to agree to the charge, this should be signed along with a deed of forbearance - you include in this deed an acknowledgement that the debt will become immediately repayable on her death and/or bankruptcy.

I look forward to hearing from you.

Kind regards

AJ
Customer: replied 3 years ago.
I don't know if there is sufficient equity in her property, how can I find out? Is there anything else I can do?
Expert:  Alex J. replied 3 years ago.
Hi,

Thank you.

How many properties does she have?

Do you know if there is a mortgage on her property?

When she dies she does not necessarily escape the debt but it will have to be repaid from her assets. If you do not have a charge then you will rank equally along side her other unsecured creditors.

Even if you have a charge on a property that may cover half the debt, that is better than nothing, because you will then be an unsecured creditor for the balance.

Do you know which property you will get the charge over? A starting point may be to go to the Land Registry and pay £6.00 to get the official title to her property - you can then see if there are any other charge holders on the property.

I look forward to hearing from you.

Kind regards

AJ