What can I do about getting my money back that I loaned to a friend???

[Peachygirl]

About two years ago, a friend asked if I could loan them £1,800 to stop them from losing their home. An agreement was drawn up stating that the loan would be paid back over 9 months, £200 per month. The agreement also stated that a charge of £25 would be paid for any late payments. This agreement was drawn up by my friend & her partner & the late payment charges was also their idea. The agreement was checked by my solicitor & signed by all parties. Two years later, despite repeated requests for the money, I still haven't received a single penny. I intend to take them to court, but need some advice regarding the best way to approach the situation, especially regarding the late payment charges?? I was told that as the agreement states that is is a nine month contract, I can only claim 9 months of charges?? But my thoughts on it are, that they are in breach of the agreement, so the charges should stand for the 24 months that they have failed to pay?? Anyone with any advice, or have been in a similar situation please let me know. I want this sorting now, the sooner the better.. Thanks.

[Kati]

Re: What can I do about getting my money back that I loaned to a friend???

About two years ago, a friend asked if I could loan them £1,800 to stop them from losing their home. An agreement was drawn up stating that the loan would be paid back over 9 months, £200 per month. The agreement also stated that a charge of £25 would be paid for any late payments. This agreement was drawn up by my friend & her partner & the late payment charges was also their idea. The agreement was checked by my solicitor & signed by all parties. Two years later, despite repeated requests for the money, I still haven't received a single penny. I intend to take them to court, but need some advice regarding the best way to approach the situation, especially regarding the late payment charges?? I was told that as the agreement states that is is a nine month contract, I can only claim 9 months of charges?? But my thoughts on it are, that they are in breach of the agreement, so the charges should stand for the 24 months that they have failed to pay?? Anyone with any advice, or have been in a similar situation please let me know. I want this sorting now, the sooner the better.. Thanks.

Hi Peachy, I'm sure you'll get lots of advice from our knowledgeable Beagles on this. Personally, I think your best bet would be sending a 'Letter Before Action' to your friend advising them that your next step will be taking her to court. You say you have a signed repayment agreement, this can be used to prove the debt is owed and also the 'late payment charges' were agreed at the time of the loan. Work out how much you would be owed (including the £25s) and include it in the LBA. Send it recorded post/signed for so that you have proof of receipt.

see this link for details - http://www.adviceguide.org.uk/englan...ore_action.htm

and this link for a template letter - http://www.adviceguide.org.uk/wales/...ore_action.htm

Kati x

[Peachygirl]

Re: What can I do about getting my money back that I loaned to a friend???

Hi Kati, thanks for you advice, greatly appreciated. Just one question reference the late payment charges. Do I request just the 9 months or am I entitled to the 24? Thanks, Peachy.

[Kati]

Re: What can I do about getting my money back that I loaned to a friend???

Hi Kati, thanks for you advice, greatly appreciated. Just one question reference the late payment charges. Do I request just the 9 months or am I entitled to the 24? Thanks, Peachy.

if it was agreed you would get £25 per month in 'late payment charges' then (IMO) you would be entitled to claim for the entire time period, but ultimately that would be your decision
K x

[Guest]

Re: What can I do about getting my money back that I loaned to a friend???

Hi

Just a word of warning,, if your friend has no money or assets, taking her to court can be an unwise move and you will be just throwing good money after bad. Frustrating s this is, it is a fact unfortunately.

[Peachygirl]

Re: What can I do about getting my money back that I loaned to a friend???

Hi Andy, she has a job & also a mortgage.

[Guest]

Re: What can I do about getting my money back that I loaned to a friend???

Hi Andy, she has a job & also a mortgage.

Then perhaps a letter before action giving her 14 days to pay, regarding the late payment charges, personally I would not bother , I would just go after the principle. i know that it was in the agreement, but it brings up all kinds of legal issues, such as penalties on a contract and I think it may muddy the waters. However as Kati says it is your decision.

[Peachygirl]

Re: What can I do about getting my money back that I loaned to a friend???

Yes that is my intended route, to send the LBA & wait to see if I get a response. I will then follow the steps that are stated on the site that Kati gave me the links to. I will keep you posted & thank you for your time. Peachy.

[Kati]

Re: What can I do about getting my money back that I loaned to a friend???

Keep us updated if you need anything
xx