How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Alex J. Your Own Question

Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3497
Experience:  Solicitors 2 years plus PQE
13113900
Type Your Law Question Here...
Alex J. is online now

Hello. I need legal advice. I borrowed £50000 from a friend

Customer Question

Hello.
I need legal advice.
I borrowed £50000 from a friend to help with a company business start up.
In 2008, I signed with her a time limited legal document to pay the loan back.
Unfortunately the business wasn't good during the four years of the payment plan, in so doing the latter was hardly executed. As the lady was working as an assistant manager and a director with 25% share, she was understanding and patient.
I've been paying her back for the last 12 months now.
The problem, now, is that she wants more money than myself or the business can afford to pay back.
What are my options?
How can I avoid selling my business on the cheap to settle this loan ?
YOUR HELP WILL BE GREATLY APPRECIATED.
KIND REGARDS
Submitted: 1 year ago.
Category: Law
Expert:  Alex J. replied 1 year ago.
Hi
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
Was the money loaned to you personally or to the limited company?
Were any repayment terms agreed?
Kind regards
AJ
Expert:  Alex J. replied 1 year ago.
Hi,
I have to go off line briefly but will be back later this evening.
Please do not be concerned if you do not hear from me right away.
Kind regards
AJ
Customer: replied 1 year ago.

Hi AJ.

Appologies for the delay to get back to you, as your reply wasn't prominantly placed. I just didin't see it.

Anyway these are informations you requested:

- The money, handed to me in cash instalments to pay for a shop premium, was loaned to me personally.

- The agreed terms were:

A weekly payment of £240 to be made, from the company profits, over four years with the starting date of June 2008.

Eventhough the company was registering losses during those years,

I was managing, with external help, to pay £50 a week.

For the last year I've been paying £100 instead.

Our relationship has deteriorated significantly, especially after she got married last year. My big worry, now, is that I might have made a big mistake in not requesting payment receipts from her.

Please get back to me ASAP.

KIND REGARDS.

Eddine

Expert:  Alex J. replied 1 year ago.
Hi,
Thank you.
Firstly if the money was loaned to you personally then she cannot claim it from the company. The company is separate legal entity and its finances must remain separate.
Secondly in terms of the payment receipts I would not worry, as long as you have bank statements to show the money being paid to her, then that would be sufficient evidence of the debt being reduced. In the mean time I would recommend that you make a ledger for your own reference detailing roughly all the payments that have been made and the outstanding balance of the debt.
Finally can you just confirm the following - you said that the debt is repaid from company profits - is the debt listed in the company accounts as a liability of the company?
Kind regards
AJ
Customer: replied 1 year ago.

Hi.

Thank you.

I've been using cash the same way I pay her weekly wages cash in hand. Unfortunately I didn't use my bank account for the loan repayment.

My accountant can confirm that the debt is listed in the company account as a liability.

Kind Regards

Eddine

Expert:  Alex J. replied 1 year ago.
Hi,
Thank you.
To clarify - the company owes the debt.
If that is the case she is only able to pursue the company for the debt as I presume you have not personally guaranteed it.
So moving forward is there any flexibility or negotiation her part over the figures? And is there a figure that you can afford and commit to?
Also do you want her out the business entirely?
Kind regards
AJ
Customer: replied 1 year ago.

Hi,

Thank you.

Now I can answer your questions as I've just had a meeting with her.

The only figure I can afford to pay her back every month is £500.

Unfortunately she demanded £1000 instead, otherwise I would have to consider to sell the shop to settle the debt.

Moreover she 's given me a 2 weeks notice to leave her job in the company.

By the way I have other debts totaling £95000 ,form loans,credit cards which I'm still paying back.

My questions are:

- As there is no receipt or bank records to prove the money she received from me before, and in case she denied it now ,would I have to pay it again?

- Can she declare me bankrupt and force me to sell the shop,worth at best £70000?

- In case she can, could this go ahead even though the money generated will meet less than half the money I owe to all my creditors?

Your help will be greatly appreciated.

KIND REGARDS

Eddine

Expert:  Alex J. replied 1 year ago.
Hi,
Thank you.
No problem - I am here to assist as much as I can.
To answer your questions:
- If you paid the money in cash then that is what you did - you could back this up with a witness statement and your own records (cash takings bank statements etc) - it will be up to her to prove she did not receive the money;
- She could put the business into liquidation by applying for a winding up order - but that would take at least 2 months - she would then risk being an unsecured creditor with all the other creditors of your business and she may get nothing if your assets do not cover all your liabilities;
-Unfortunately yes this could go ahead - but she will be treated equally to all the other creditors - it would be a silly thing to do as she would only get half her money back or less.
Why dont you offer her security for her debt - you have to say to her that if she keeps pushing she will risk the company going into liquidation at which point the matter out of your hands. Ask her would she consider accepting £500 a month in exchange for security (i.e a debenture) over the company assets?
Any feedback is gratefully received.
Kind regards
AJ

What Customers are Saying:

 
 
 
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
< Previous | Next >
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
  • A quick response, a succinct and helpful answer in simple English. I believe I can now confront the counter party with confidence -- worth the 30 bucks! Rick
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
 
 
 

Meet The Experts:

 
 
 
  • Jo C.

    Jo C.

    Barrister

    Satisfied Customers:

    30316
    Over 5 years in practice
< Last | Next >
  • http://ww2.justanswer.com/uploads/EM/emus/2015-7-7_192327_bigstockportraitofconfidentfemale.64x64.jpg Jo C.'s Avatar

    Jo C.

    Barrister

    Satisfied Customers:

    30316
    Over 5 years in practice
  • http://ww2.justanswer.com/uploads/BE/benjones/2015-12-1_0437_ennew.64x64.jpg Ben Jones's Avatar

    Ben Jones

    UK Lawyer

    Satisfied Customers:

    11553
    Qualified Solicitor - Please start your question with 'For Ben Jones'
  • http://ww2.justanswer.com/uploads/BU/Buachaill/2012-5-25_211156_barrister5.64x64.jpg Buachaill's Avatar

    Buachaill

    Barrister

    Satisfied Customers:

    1754
    Barrister 17 years experience
  • http://ww2.justanswer.com/uploads/JO/jojobi/2013-3-19_0265_maxlowryphoto.64x64.jpg Max Lowry's Avatar

    Max Lowry

    Advocate

    Satisfied Customers:

    894
    LLB, 10 years post qualification experience
  • http://ww2.justanswer.com/uploads/UK/UKLawyer/2012-4-12_9849_F2.64x64.jpg UK_Lawyer's Avatar

    UK_Lawyer

    Solicitor

    Satisfied Customers:

    750
    I am a qualified solicitor and an expert in UK law.
  • http://ww2.justanswer.com/uploads/KA/Kasare/kasare.64x64.jpg Kasare's Avatar

    Kasare

    Solicitor

    Satisfied Customers:

    402
    Solicitor, 10 yrs plus experience in civil litigation, employment and family law
  • http://ww2.justanswer.com/uploads/OS/osh/2015-7-7_19268_gettyimagesb.64x64.jpg Joshua's Avatar

    Joshua

    Lawyer

    Satisfied Customers:

    8199
    LL.B (Hons), Higher Prof. Dip. Law & Practice
 
 
 

Related Law Questions