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My question is can a friend take legal action against you to force you to sell your house to repay an informal loan in full when you're already making monthly payments to repay the debt?
Someone who I considered a friend, but subsequently have concerns they may be acting as a money lender, loaned me a total of £23,000 about 3 years ago. This was meant to be an informal loan between friends, but at the time she proposed lending me the money, she insisted that I agree to interest on the loan being applied.
I was in financial difficulty and had little choice, so agreed. Initially, she didn't want anything drawn up in writing to confirm the loan and there were never any terms agreed about when it should be repaid or how much. She also told me she was very relaxed about it being repaid and said she didn't need the money as she was well off.
But I proposed that we put something in writing to avoid any misunderstandings, and I drafted an agreement. The draft simply confirmed the amount loaned and that I would pay it back as soon as I was able to. There were no set timeframes or amounts, as I couldn't say when I'd be able to pay back anything. She resisted having anything in writing at that time, preferring to have just a verbal agreement. She also refused my offer to go to a solicitor and have a proper agreement drawn up. She repeatedly told me she wanted it keep things off the record/informal. I sent her the draft agreement, but I don't know if she ignored it or ever signed it.
During the time she gave me the loan, she also asked me to work for a small business that she and her partner ran. They said they weren't able to pay my usual rate, and asked me to agree to doing freelance work for them at much-reduced pay, which again, because of my dire financial situation and struggle to get a job elsewhere, I agreed to.
I worked very hard for them, putting in many hours of work, and they effectively got thousands of pounds of labour from me without compensating me for it.
They also insisted that I sometimes sign contracts for additional occasional work, which meant that I had to be available to work solely for them during these periods. But they then tried to change the terms and conditions and remove payment for work in the future that had been agreed in advance and drawn up in a signed contract between us, leaving me out of pocket.
I was unhappy about this as it felt unfair and they were unwilling to see my point of view that it was a breach of contract. I had other concerns after hearing reports from others that my friend and her partner were being accused of bullying and financial misconduct in their business. I decided to step away from this business, as they couldn't be trusted to be honest with some of their dealings and felt I was being exploited and used.
My friend was unhappy that I stopped working for them all together, and her attitude to me changed instantly. She immediately became very aggressive and bullying towards me. She has harassed me for over a year, by email, text, and phone calls.
Despite having no clear agreement, she insists that I repay, with interest, the loan in full. She knew my financial situation as I had been very open and transparent. I have tried to keep an open communication with her and be honest about my circumstances. I have repeatedly tried to reason with her that I couldn't afford to pay her back immediately and we've never had an agreement that I should.
But because she continued to harass me, and retaliated by spreading malicious gossip about me to mutual acquaintances and trying to turn people against me, which greatly upset me, I offered to pay her £200 per month, even though I told her this would put me into regular debt every month.
I have consistently paid £200 per month to her for almost 2 years, even though she knows it causes me financial hardship and I have been doing this out of fear of more retaliation. She has been accepting these payments, but still insisting that I pay the full loan immediately.
She then told me she wanted to draw up a new written agreement, with terms and conditions, that only favoured her and were completely unreasonable. I refused because it wasn't fair and was concerned that she would then try to enforce it. I told her we already had an agreement in place, and she had plenty of time and opportunity to make any amendments to it at that time. She wasn't happy with this and aggressively bullied and harassed me over this, trying to force me to sign some new agreement, which made me feel very uncomfortable.
More recently, she has been threatening to take me to small claims court. There is about £19k left of the debt. She knows I am a vulnerable person, having a mental health disability, and finds the thought of having to attend Court terrifying.
As a side note, she is a wealthy lady, owning a property portfolio of 9 houses, which she rents out in addition to her own home. She told me she had tens of thousands of pounds of disposable income "just sitting around in bank accounts". She also regularly lends money to other vulnerable people with mental health and physical disabilities, again with interest applied.
I have considered reporting the harassment and stalking to the Police because of the distress it's caused which has triggered relapses in my mental health.
Separately, I contacted a debt advice organisation, who did an investigation and had concerns about her money lending to vulnerable people. They wanted to take it further, but I was frightened that she would find out it was me who reported her, and may retaliate even more.
I'd like to know how to defend a claim? Would the Court think it's reasonable that I'm making efforts to repay £200 a month even though it's more than I can afford? Would the Court force the sale of my home, where I live with my elderly mother and son?
I appreciate this is a long story and I appreciate you reading to the end. Any advice given would be gratefully received. Thank you.
Someone who I considered a friend, but subsequently have concerns they may be acting as a money lender, loaned me a total of £23,000 about 3 years ago. This was meant to be an informal loan between friends, but at the time she proposed lending me the money, she insisted that I agree to interest on the loan being applied.
I was in financial difficulty and had little choice, so agreed. Initially, she didn't want anything drawn up in writing to confirm the loan and there were never any terms agreed about when it should be repaid or how much. She also told me she was very relaxed about it being repaid and said she didn't need the money as she was well off.
But I proposed that we put something in writing to avoid any misunderstandings, and I drafted an agreement. The draft simply confirmed the amount loaned and that I would pay it back as soon as I was able to. There were no set timeframes or amounts, as I couldn't say when I'd be able to pay back anything. She resisted having anything in writing at that time, preferring to have just a verbal agreement. She also refused my offer to go to a solicitor and have a proper agreement drawn up. She repeatedly told me she wanted it keep things off the record/informal. I sent her the draft agreement, but I don't know if she ignored it or ever signed it.
During the time she gave me the loan, she also asked me to work for a small business that she and her partner ran. They said they weren't able to pay my usual rate, and asked me to agree to doing freelance work for them at much-reduced pay, which again, because of my dire financial situation and struggle to get a job elsewhere, I agreed to.
I worked very hard for them, putting in many hours of work, and they effectively got thousands of pounds of labour from me without compensating me for it.
They also insisted that I sometimes sign contracts for additional occasional work, which meant that I had to be available to work solely for them during these periods. But they then tried to change the terms and conditions and remove payment for work in the future that had been agreed in advance and drawn up in a signed contract between us, leaving me out of pocket.
I was unhappy about this as it felt unfair and they were unwilling to see my point of view that it was a breach of contract. I had other concerns after hearing reports from others that my friend and her partner were being accused of bullying and financial misconduct in their business. I decided to step away from this business, as they couldn't be trusted to be honest with some of their dealings and felt I was being exploited and used.
My friend was unhappy that I stopped working for them all together, and her attitude to me changed instantly. She immediately became very aggressive and bullying towards me. She has harassed me for over a year, by email, text, and phone calls.
Despite having no clear agreement, she insists that I repay, with interest, the loan in full. She knew my financial situation as I had been very open and transparent. I have tried to keep an open communication with her and be honest about my circumstances. I have repeatedly tried to reason with her that I couldn't afford to pay her back immediately and we've never had an agreement that I should.
But because she continued to harass me, and retaliated by spreading malicious gossip about me to mutual acquaintances and trying to turn people against me, which greatly upset me, I offered to pay her £200 per month, even though I told her this would put me into regular debt every month.
I have consistently paid £200 per month to her for almost 2 years, even though she knows it causes me financial hardship and I have been doing this out of fear of more retaliation. She has been accepting these payments, but still insisting that I pay the full loan immediately.
She then told me she wanted to draw up a new written agreement, with terms and conditions, that only favoured her and were completely unreasonable. I refused because it wasn't fair and was concerned that she would then try to enforce it. I told her we already had an agreement in place, and she had plenty of time and opportunity to make any amendments to it at that time. She wasn't happy with this and aggressively bullied and harassed me over this, trying to force me to sign some new agreement, which made me feel very uncomfortable.
More recently, she has been threatening to take me to small claims court. There is about £19k left of the debt. She knows I am a vulnerable person, having a mental health disability, and finds the thought of having to attend Court terrifying.
As a side note, she is a wealthy lady, owning a property portfolio of 9 houses, which she rents out in addition to her own home. She told me she had tens of thousands of pounds of disposable income "just sitting around in bank accounts". She also regularly lends money to other vulnerable people with mental health and physical disabilities, again with interest applied.
I have considered reporting the harassment and stalking to the Police because of the distress it's caused which has triggered relapses in my mental health.
Separately, I contacted a debt advice organisation, who did an investigation and had concerns about her money lending to vulnerable people. They wanted to take it further, but I was frightened that she would find out it was me who reported her, and may retaliate even more.
I'd like to know how to defend a claim? Would the Court think it's reasonable that I'm making efforts to repay £200 a month even though it's more than I can afford? Would the Court force the sale of my home, where I live with my elderly mother and son?
I appreciate this is a long story and I appreciate you reading to the end. Any advice given would be gratefully received. Thank you.
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