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ukfamilysolicitor, Solicitor
Category: Law
Satisfied Customers: 1494
Experience:  Qualified Solicitor Currently specialising in Family. Also experienced in Corporate, Employment, Civil Litigation, Debt Recovery
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I am drawing up a financial settlement with my ex wife. We

Customer Question

Hi there, I am drawing up a financial settlement with my ex wife. We had a family loan from my father to buy an investment property, which I have been paying back by direct debit for the past six years. She claims that as there is no documentation that this loan would be considered a 'gift' in law, why should this be true when the property will still have to be paid back by myself when we seperate?
Submitted: 10 months ago.
Category: Law
Expert:  ukfamilysolicitor replied 10 months ago.


Welcome to Just Answer

I am a Solicitor and will assist you.

I can confirm that in relation to monies received from a relative in relation to a property, that when it comes to dealing with divorce and the financials then it is not unusual for an argument to occur as to whether the money was a gift or a loan.

What you need to know is that if the money was a loan then it is not considered to be part of the matrimonial assets, whereas if it was a gift then it would be.

What you have in your favour is that you have been consistently been paying a direct debit for the last 6 years. This evidences that the money was a loan and a Judge would likely be persuaded that this was not a gift but a loan with the monies to be repaid by the fact that you have been paying a direct debit for so long.

Whilst a written agreement in relation to the loan would have been a good idea, with hindsight, it can be that loans can be agreed verbally and do not need to be in writing and the fact that you have been paying a direct debit assists your argument.

It then comes down to how you proceed, if the amount to be repaid under the loan is large and your wife is arguing that this is a gift then it may well be that it is worth letting the court decide this for you. The court can hear evidence from your father as well as considering the direct debit payments so that the court can decide on the balance of probabilities (51/49) whether they consider this was a gift or a loan that was to be repaid.

Let me know if I can assist you further.

kind regards


Please kindly remember to rate positively so that credit is received for helping you today. Your question remains open when you leave positive feedback and I will be able to answer your follow up questions for free for you.

Customer: replied 10 months ago.
The amount is not large, but I am in a position where I need as much as I can get for a house deposit. I have already agreed to sell her the family home and been more than reasonable about the divide of furniture etc. The loan is 17k but I owe her 20k in the 50% split of assets. Im minded to refuse to accept her calculations and argue for a 10k reduction based on the history of the loan. We have recieved gifts from our parents in the past none of which were subject to pay back conditions. I suppose the ball would then be in her court.
Expert:  ukfamilysolicitor replied 10 months ago.


Thank you for your response, please do accept my apologies for my delay in responding to you.

You are correct - if your wife wants to argue this is a gift and not a loan then she is the one who has to prove this.

What you need to 'weigh in' is the litigation risk. Basically if you cannot agree the issue between you and you wanted to have legal representation in financial proceedings then you can spend all of that money on legal fees which of course really isnt worth is.

If you haven't attempted family mediation yet then this is worth doing. This is actually a prerequisite before either of you can make an application to the family court for a financial order other than by consent.

Google family mediation in your area and give them a call to self refer. They can help you try and agree matters without the need for court.

If you do managed to reach agreement, make sure that this is prepared into a consent order and submitted to the court for approval when applying for decree absolute in the divorce proceedings as this will become legally binding once approved and will prevent any future claims being made.

Let me know if I can assist you further

kind regards


Please kindly remember to rate positively by using the stars so that credit is received for helping you today

Expert:  ukfamilysolicitor replied 10 months ago.


I note that this question remains unrated. Your feedback is important to me and I would be grateful if you could kindly rate my help by using the stars.

If I can assist you any further then please do not hesitate to ask.

kind regards