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Joshua, Lawyer
Category: Law
Satisfied Customers: 26070
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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I loaned a lot of cash to a friend without a written

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I loaned a lot of cash to a friend without a written contract. Is there a way of getting back legally. They can't remortgage as proposed as they haven't got 3 months account. I don't think they will sell anytime soon so charge won't help ?

Hello and thank you for your question. I will be very pleased to assist you. I'm a practising lawyer in England with over 10 years experience.

  1. May I ask what the money was spent on to your knowledge?
  2. How much is in question?
  3. Do they have equity in their home sufficient to pay or do they have other creditors too?
  4. Do you have proof the money was paid to them - e.g. bank statements?
Customer: replied 10 months ago.
It was leant to pay a court order. The amount 120,000, they have equity but won't be selling. No creditors to my knowledge, I paid by bank transfer to hmrc so have records.

Thank you for the above. My apologies for the delay in replying to you - I had to take a phone call. From what you say there were no agreed terms as to when the money should be paid back to you?

Customer: replied 10 months ago.
It was agreed to be paid back in July as they were going to remortgage, but haven't got 3 months accounts. My error was no written agreemento as is to be my future brother in law. He is saying he will try and sort out but I just need to know if there are legal options at any point.

Thanks - could you just confirm if that agreement was made in writing - email, text message etc or just verbally?

Customer: replied 10 months ago.

thank you. As you have no written agreement with your brother in law, tthe first step would be to establish a date of liability whereby you must repay the loan to you. Just because there is no written agreement does not mean he does not have to repay the money as there is no presumption that money given to a third party is a gift. Rather, it will be presumed to be alone unless your brother-in-law can prove that it was a gift for which he will need some considerable evidence.

however, as you have no written agreement as to when debt should be repaid, the first step would be to serve a notice upon him referring to the loan amount, and any other agreed terms and put him on notice that the debt is now repayable with immediate effect and reserving your right to claim interest upon the capital sum if payment is not made within seven days or such longer period you are prepared to extend.

If he is unwilling to pay or is unwilling to make a proposal to payment in instalments otherwise, there are a number of options available to you.

The first and most simple option is to serve him with a statutory demand which is free for you to issue and is a statutory notice requiring him to make payment warning him that if he fails to do so, he can be made bankrupt. If you believe there is sufficient equity in his share of any property he owns as well as any other assets he may own, then applied to make him bankrupt, whilst not cheap as an application costing around £750, could serve as an effective approach for recovery as all his assets will transfer to an official receiver he will then repay you as a creditor which takes away his control.. The risks of this approach would be that if his debts exceed his assets, you may not make a full recovery and of course, is likely to seriously damage the relationship you may have with him going forward.

nevertheless, a statutory demand can still be considered as there is no requirement upon you to make an application for bankruptcy if he ignores it and it is free to issue. In many cases, a statutory demand will be sufficient to persuade a reluctant debtor to pay what he owes or at least make a proposal for payment as any people are keen to avoid potential bankruptcy risk.

The other approach available to you is to issue proceedings in the county court for recovery. Given the amount involved, you'll be able to seek legal costs to assist you with such an application though providing you have evidence that the payment was made, there is little substance to a defence that could be raised to your claim. Once you receive judgement, you have a variety of means available by way of enforcement action which would include bailiffs, attachment of earnings orders, charging orders, payment by instalments and so on.

There are pros and cons to each individual type of enforcement action. If he has a property, a charging order is an obvious approach but it will not necessarily get you any money quickly as obtaining an order for sale if he owns the property jointly and especially there are children involved can be difficult. however, it does have the advantage of securing the money at the very least together with interest for the future and application for sale particularly given the amount involved is in principle available to you subject as above.

Does the above answer all your questions? If it does, I should be very grateful if you would kindly take a moment to click a rating for my service to you today. Your feedback is important to me. If there is anything else I can help with please reply back to me though

Customer: replied 10 months ago.
That has been very helpful, thank you very much for your help and advice. Claudia

A pleasure. If you require any further assistance in particular drafting a notice, please do not hesitate to revert to me. All the best

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