Legal status of loan

[davidrichards27]

Hi everyone

I have a question and hope someone can advise me as soon as possible.*



A few weeks ago, I started working for a new employer. This person offered to lend me some money (£700) from his iwn accountvand not the company bank account, to help me until first pay day. I asked if he wanted me to sign a letter detailing the loan and repayments and he said he was not bothered about signing anything.



About two weeks ago, the employment was terminated and I left the business having worked only one week!



Now this petson is demanding immediate repayment of the loan, which I cannot do as I am unemployed and looking for work.*



He has now asked me to sign a letter stating when I will make the repayment and wants the money in one month.



As I offered to make a formal arrangement at the time and he refused, what is the legal situation regarding this? Does he have the right to make demand of repayment when there was never a written agreement in place?

I hope some one can please help me as this is worrying me a lot.



I look forward to any feedback and advice as soon as possible.*



Many thanks

David

[warwick65]

Re: Legal status of loan

How was the loan paid to you, was it cash or via a bank transfer?

Seems a bit silly of anyone to lend a new employee 700 without some surety

Have they made any deductions from your weeks pay?

[davidrichards27]

Re: Legal status of loan

Hi Warwick

Thanks for the response.

It is a strange matter, but the employer was extremely sympathetic to my financial situation as I had been out of work for over 6 months prior to his job offer.
However, after the first week, the job role was changed completely from a field-based role to an internal telesales Role, I had NEVER applied for this role and when we discussed it, the revised role was with a substantial reduction in salary and withdrawal of a company car, making it impossible to get to the office, so he said if I did not like the new terms then to leave. At this point no contract of employment had been issued.

In relation to a deduction from my salary of one week, firstly, this money was in two bank transfers from his personal account and NOT the company account, so I don't see he could deducted anything from this week of e ages, and secondly, as nothing was signed to make a repayment agreement, surely he could not deduct from my wages without formally notifying me first?

I am confused and worried. He is demanding repayment within one month and I only get just over this sum of £700 in benefits so paying this in one month is impossible.
I guess I should make him a payment plan proposal based on my finances at tje moment and hope he sees sense in this?

For background information, currently I am working with StepChange debt charity as I have some £16,000 of priority debts, and they have advised me that this 'loan' is not seen as a priority one and will be addressed at the end of my payments for priorities out of what I have left.

As you see this is a real mess and I am beside myself with worry.

Any further comments or advise will be gratefully received.

Many thanks
David