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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3653
Experience:  Solicitors 2 years plus PQE
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In 2008 my husband started a new business as a property

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In 2008 my husband started a new business as a property developer and borrowed £140k from a person he knew through the industry. The credit crunch and the Bank brought the site to a halt as the funding was halted and the bank moved in. Martin and myself signed a promissory note for £140k in early June £2011; the money was to be repaid within a year. This person had a charge against my mothers house and when it was sold the profit of £109k was paid to this person early in July 2011. He wrote a cheque to Mom for the £9k so that he had a nest egg. The balance on the promissory note was now £40k. Unbeknown to me, my husband then borrowed £70k from the same person, this time the 2 cheques were not made out to the company and were paid into an account I knew nothing about. I know the reason for not paying into the company account; the bank would have taken all of the funds. During this time I have kept in touch with this person letting them know the outcome of complaints I have made to the bank and to the Financial Ombudsman all of which have been denied. At last the banks are admitting that they "bled" micro companies dry in order to recoup money they had lost during the credit crunch. We have a case with a Barrister now and hopefully the outcome will be in our favour and we can all regain monies lost. This person has just issued a "Demand for payment" of £140k to be paid within 14 days or legal proceedings will commence. Can the £70k that my husband borrowed be revisited on the original promissory note> When this person agreed to loan the money there was no contract, written or verbal regarding repayment. The 6 year statute bar on this money expires on the 17th of this month. It was always my understanding that if compensation was awarded through our court case the £70k would be repaid at that time. I also believed that this person was of the same opinion. We have to agree to a charge against our property and then he will call the "dogs off". The last 9 years have been a nightmare and it has cost us dearly, not only money, but the end of a 36 year marriage. My husband is a broken man and he hasn't worked for the last 5 years.
Submitted: 11 days ago.
Category: Law
Expert:  Alex J. replied 8 days ago.

Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you. Was the promissory note an "all monies" note or did it only reference the £140k. Is this individual trying to pursue you for the additional borrowings that your husband drew down under the terms of the promissory note? Kind regards AJ

Customer: replied 8 days ago.
Hello,
The Promissory note was for the £140k at the very being of the build in 2008. The bank wanted the company to put in £240k but we couldn't raise that amount. The money was paid into the Solicitors account and then used to buy the land, one house that was to be knocked down and used as a start up fund for the development. The note was written because the lender had a charge against my Mothers house to ensure that he got his money back. House prices fell and my Mothers house sold for only £112k not the £140k it was originally valued at. When Moms house was sold, the lender was repaid £100k leaving £40k on the promissory note.
Customer: replied 8 days ago.
I think I missed a number out
Customer: replied 8 days ago.
Hello are you still there? I thought you were asking me to call you.
Customer: replied 8 days ago.
Can you email me a time for us to continue. I do need to respond to the Solicitors letter by 19th July.
Customer: replied 8 days ago.
Hello, not sure what to do now. How do I find out if you are still there? I work from 7.30 until 4.00 and I don't get home until after 5. Would you be able to contact me after five. This is quite important to me.
Expert:  Alex J. replied 8 days ago.
Thank you. So assuming you did not pay the £100k as a full and final settlement to this individual he can only claim the balance on the promissory note - £40k. He cannot keep adding to the balance of promissory note and increasing your indebtedness without your consent. Did he have any right to charge you interest for the debt? Kind regards AJ
Expert:  Alex J. replied 8 days ago.
I will be online after 5 as well. Kind regards AJ
Customer: replied 7 days ago.
he could have charged interest on the debt, but by waiting until the 11th hour, 2 days before the end of the 6 year statute bar he said it meant he didn't charge the interest he could have. The problem here is after repaying £100k he then lent my husband £70k. This was a "loan" made out in a cheque or 2 of them for £35K. The cheques were in Martins name; this amount has been added onto the original promissory note. Surely this is a separate matter? I'm not disputing that there is money to be repaid, I am disputing the amount on the original note. The £70k was borrowed, with no written or verbal contract and no Solicitor was involved; the 6 year statute bar has also run out. I am willing to negotiate and resolve this issue but I need to know what I am thinking is correct and therefor I can confidently go forward and put my case to his Solicitor; I cant afford to engage a Solicitor for us. If I am wrong then I will have to sell the house and settle the debt. Through all of this financial crisis my husband left the marital home and has had a breakdown. He hasn't been able to work for almost 4 years. He was a Principal Building Inspector and highly respected. If I could just resolve some of our financial problems I'm sure it will help him. We have been married for 37 years. Regards Elaine
Expert:  Alex J. replied 7 days ago.

Thank you. The bot***** *****ne your assets are not liable for the additional £70k - the Statute of Frauds states that you can only accept liability for another persons debt if you do so in writing. The promissory note is only for a fixed so he cannot unilaterally add to the promissory note a capital without your consent. Does he have a charge on your property? Kind regards AJ

Customer: replied 7 days ago.
There is no charge as yet, but if we agree to do it, he will stop the demand for payment.
Customer: replied 7 days ago.
I am just going to get something to eat and I will be back at my screen at 6.15 to carry on. I don't have a lap top so I have to keep on coming back to see if you are there.
Thank you Elaine
Customer: replied 7 days ago.
is it correct that the 6 year statute bar means that the £70k is now dissolved anyway? This man also first said he wanted to invest in the company and then he said it was a loan because things started to look bad due to the credit crunch, but then again he loaned Martin a further £70k to complete the build !
Expert:  Alex J. replied 7 days ago.

Hi, Thank you. You should not agree to a charge over your share of the property for the £70k - unless you accept liability for that in writing you are not liable. The debt only becomes statute barred (this would be the balance of the original promissory note) if six years go by without a demand. When did he last make a demand for the original balance - not the further monies advanced to your husband?

Customer: replied 7 days ago.
The original note was signed on the 30th June 2011. The sale of Moms house was completed on the 1st July 2011 and all of the proceeds went to him on the day. It might have been bacs transfer I don't think he waited for a cheque. He didn't ask again for any payment until the 27th of June 2017, letter of demand for the full payment within 14 days. This payment isn't statute barred, he thought he could demand all of the money in one hit. I think he told his Solicitor about the £70k loaned after the repayment.
The £70k was borrowed between 2nd July and the 12th July 2011 and no payment has been asked for or made.
Customer: replied 7 days ago.
Sorry I DON'T think he told his solicitor about the £70k. The house is still in both our names so I know that he will come after the house for his £70k. We hopefully have compensation due and I was going to repay the money then. I thought that we had an understanding, but he got in just in time.
Customer: replied 7 days ago.
I just want to put the brakes on until the outcome of our case against the bank. Mom has lost her home and we have invested and lost £138k plus 3 years of working on site with no payment what so ever. We are not refusing to pay.
Expert:  Alex J. replied 6 days ago.

Hi, Thank you. To be clear he will be able to enforce the existing £70k against your husbands share of the property. If you want to put the brakes on you could offer him a charge over the property (with your consent) and in return ask for a forbearance agreement, this would be forbearance against being sued or having any enforcement proceedings being take. When will you expect to receive any compensation?

Customer: replied 6 days ago.
Is the £70k 6 year Statute barred ? If its not can you explain to me why its not please? Its not that we are not going to pay him, its just that he has been so sneaky in the way he has treated me especially. All he needed to do was talk to me as we have done over the past 6 years. I had forgotten about the promissory note and I thought he was "with me" on the fact that payment would come from any compensation. He invested in the company along with my Mom and us. Now he wants to change it because we have all lost our money. It has taken 5 years to get this far with our claim against the bank, it could be over in a month it could take another year and he knows that. We are all stuck in limbo.
Expert:  Alex J. replied 5 days ago.

Hi, Thank you. For a debt to become statute barred, you need to go 6 years without there being any demand for payment - every time a demand for payment is made this period will reset. Sorry if I have misunderstood this point but to confirm the £70k is your husbands debt only?

Customer: replied 5 days ago.
Thank you for your advice, it will help in negotiating what happens next. The best outcome will be, compensation that gives everyone their money back. If there is no compensation then I will have to leave the house to Chris's family in my Will. I work for the solicitors Mills & Reeve, but I didn't want to involve anyone at work. The Family Solicitor is handling my divorce and Martin will sign a document to say the Mom and myself can live in the house until the death of both of us, I will just have to add Chris to the list. He will be paid, we could not "steal" that amount of money off anyone. Sorry for the disjointed conversations. You have been very helpful. How do action payment?
Expert:  Alex J. replied 4 days ago.

Hi, Thank you. ***** can assist any further please do not hesitate to contact. In the mean time I would be most grateful if you would rate my answers on this thread? Kind regards AJ

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