Lending money to friends & family

A question about : Lending money to friends & family

not sure if this is right board..

member of our family lent couple of Јthousand to a friend to fund something....
which didn't happen .. and guy has made himself completely uncontactable . Apparantely he's done similar with couple of other people

Whilst probably classed as my own stupid fault for just handing over cash .. last thing we expected was this .. from a supposedly best friend .
What legal actions can i take .. or legal threats can i make to try and get him to realise i'm seriously wanting my money back.

Best answers:

• Have you got anything in writing or even a receipt, or maybe witnesses. If not you are unlikely to get your money back if he doesn't want to pay.
  Regards
  X
• no...and no...
• How was the money paid?
  If cash - it is your word against his and unless he deposited in a bank account is untraceable so you can't prove the existence of the loan.
  If by cheque or electronic banking - then the transaction will be traceable and a Court would have to decide whether on the balance of probabilities this money was a loan and not a gift or payment for something.
  Not having it in writing does not mean you don't have a agreement, just that you can't actually prove it.
• If the loan was for less than Ј5000, you can make a claim in the small claims court. You lodge the claim on-line, and if he fails to file a defence, you apply for judgement. If he does file a defence (eg saying this was a gift and never intended to be repaid, or denying the money was given to him), then you would have to go to court and argue your case. It is all fairly straight forward, and you don't have to have a solicitor.
  BUT, firstly you have to know his address, so the papers can be served on him. And, secondly, even if you get judgement against him, the chances of actually getting the money if he chooses to disappear, are very poor indeed.
  County court bailiffs have few powers. If he refuses to let them in, they will go away. If he says everything is on HP/rented/belongs to his girlriend, etc, they will accept that. You can get an attachment of earnings order, if you know where he works, but that is another step and if he leaves his job or is not working, that is useless. Similarly, if you know his bank account details, you can ask the court to order the bank to pay the money to you. But if there is no money in the account, that doesn't help, and of course once he knows about this, he will probably stop paying money in.
  All these steps cost money and while that cost will be added to the debt, that doesn't help you if he isn't paying up anyway.
  The county court system works, PROVIDED that a person doesn't was a CCJ on their record. If they don't care, or already have CCJs, then you are stuffed, because the enforcement procedures are really not effective against someone like that.
  You know the guy. If he is likely to be concerned about being taken to court, the threat may be enough. If he couldn't care less, you are wasting your time and throwing good money after bad.
  Good luck and let us know how you get on.
• if there aren't witnesses or any 'accounts' which he paid in to then it would be difficult.
  On the other hand, if there are, you could always consider a criminal complaint of theft. You don't owe him any favours so this could be a possibility but ONLY if there was a witness or you can show it in his bank transaction and yours.
  Difficult. Hope you get on ok...
  A_S x
• There is no theft here. Failing to repay a loan is a civil matter, not a crime. The only way it would be a crime is if the funds were obtained by means of a fraudulent transaction or duress. If he was given the money and has simply refused to repay it, this would not be a crime even if there was a loan agreement.
  There is however possibly the question of deception. If the money was given for a particular purpose and was not used for that, it may fall into the category of being obtained by deception. This would be strengthened if the project did not actually exist in the first place rather than simply falling through. If the other people he has done it to also report it to the police they may consider this enough evidence to pursue the matter. It is worth reporting therefore as the others may have already done so or might in the future. In the absence of anyone being able to corroborate the situation or having suffered the same, there is unlikely to be enough evidence for a prosecution.
• thanks guys... some useful replies todays ..
  i transferred the money by internet banking into his bank account ...
  we don't have anything in writing ... it was all done as a "family/friends" thing.
  apparantely he's moved out of his rented house .. but no-one knows where to... i have written a polite " please send me my money" to his rented house .. i believe he is picking his mail up.. but as with phone calls/texts he's clearly not wanting to respond .
  i guess i'm now thinking that the best option is to get something official .. "legal" ...sent to him in the hope that it'll show him i'm serious.
• I hope this is the right post for this;
  My brother gave his friend Ј62,000 to buy some shares in December. It later transpired that his friend had a gambling problem and guess what??
  Yes you guessed it, he actually used the money to bet with, and apparently he never had any intention of buying shares.
  My brother has now threatened him with legal action so the friends father has got involved and offered my brother Ј35,000 to settle the matter or his son will fill for bankruptcy (he has no valuable assets).
  The thing is, the friend is a stock broker in the City and does not really want this.
  If my brother sues him, is there any way to recover his money?
  Any advice welcome,
  Thanks.
• Can you clarify 'gave his friend Ј62k to buy some some shares'?
  Do you mean the friend was acting in a formal capacity for your brother - or the Ј62 was a gift conditinoal on buying shares or was a loan or something else?
  Does the friend work independently or as part of a firm? The Financial Ombudsman may have an interest in this. (Also the Serious Fraud Office if he has committed certain offences).
  The father of the friend should be told to stay out of the matter - it's nothing to do with him (unless he is acting in a legal capacity for the friend) - and your brother has no obligation to deal with him.
  There is a lot of money involved here - he may also need to consider if he has been defrauded into parting with it in the first place - in which case he should consider involving the police as well.
  What paperwork has he got? Maybe a Terms of Business statement and receipts?
  Sorry - more questions than answers I'm afraid - but yes, suing him for the money is one option - but wait and take proper legal advice first.
  It sounds to me as though 'if' he had a gambling problem and got your brother to part with Ј62k, then he 'may' have done it with the sole intention of raising money to fund his habit. This may also have affected other clients who may also be out of pocket.
  Don't be put off by spurious threats of bankrupcy from the father - it sounds like a lot of money is at stake here and your brother needs to take proper legal advice regarding recovering it.
• First of all thank you very much for taking the time to reply in such detail.
  The money was nor given in a formal capacity, he was buying them as a friend as my brother did not really know what he was doing.
  The friend works for a company in the city.
  As for paperwork, my brother has got a complete paper trail along with a signed declaration that he owes my brother the money which was countersigned by an independent solicitor and my brother so as to prove that he was not forced.
  What type of law do you think this is so that we may approach the right solicitors?
• If the 'friend' works for a company - and there is a complete paper trail your brother may stand a very good chance of recovering his money by ultimately suing the company. (He needs to take advice from a solicitor on this - maybe even the original solicitor he used?) This would come under civil law and most solicitors dealing in contract and tort should be able to deal with this for him.
  On the individual side, there is however, what appears to be a criminal offence of theft - i.e. the Ј62k has been dishonestly appropriated by the 'friend' who has assumed ownership of it by using it for his own purpose (gambling).
  Therefore, your brother, in taking civil advice from the solicitor about how to recover the money, should also ask about reporting the theft of the Ј62k to the police.
  If the case goes ahead, the CPS will prosecute.
  If it turns out that he was acting independently of the company, and the company can prove this - suing the company may not be possible. (Again, solicitors advice needed here).
  If the CPS run with the case, your brother MUST ensure that they are aware he wants his Ј62k back and that any judgement takes accont of this.
  (This avoids having to go back to court seperately - or suing him for the return of the money).
  Don't forget to ask about damages and costs in addition to the Ј62k.
• he was acting on his own, the company is a very good companyh and had nothing to do with this.
• my brother tape recorded conversations with his friend who was at the time saying how he had purchased all kinds of shares.
  Also if he has no assets, then how can the court make him pay back the money?.
• Simple answer. It can't.
  One of the biggest problems in these cases is not getting judgement, but enforcing the judgement (ie getting your money back).
  If he owns a house, you can get a charge against it, so that when he sells it, you get paid out of whatever is left after the mortgage company, solicitor, etc etc have had their cuts.
  If he has a bank account, you can ask for a garnishee order, so the bank has to pay the money to you. But the money has to be there, and there is nothing stopping him openng a different bank account.
  He is working, so you can get an attachment of earnings order, in which case his company must pay a set sum each payday to you. But that only works as long as he doesn't change his job or become unemployed.
  In order to use these methods you must first go to court and get judgement, and the go back to court for an enforcement order. This all costs money. Sure it will be added to the amount he owes you, but you have to pay it up front and then try and get it back from him, aong with the rest.
  Or, you can file for bankruptcy against him. That costs money too. It might also cost him his job. In which case he will have even less money to pay the debt, and after a certain time (it used to be three years, but there was talk of reducing it two one year in some cases, but I don't know if that actually happened) the bankruptcy is discharged and the debt is wiped clean. Which doesn't help you.
  It is true that you may get some satisfaction if he is prosecuted and ends up with a crimina record. But if your main aim is to et your money back, it probably won't help much.
  Sorry I can't be more help.
• I'd suggest seeing a solic who specialises in breach of contract cases.
  If the "friend" wants to avoid bankruptcy then i'd think he'll try to raise the money somehow.
  Once your brother issues court proceedings and enters a court judgment against him (he has no defence to the claim IMO) there are various ways to enforce the judgment. One is an Attachment of Earnings Order whereby his employer is ordered by the court to deduct an approp sum from his salary each month to pay off the debt. Your brother could threaten this as i imagine the "friend" would want to avoid his employer knowing about the whole sordid business !!
  Hope this helps.
• once again thanks!
• Hi
  I can relate to this as stupidly I did the same thing years ago!
  After a few months of not getting anything back I asked them to write me a repayment scheduleThe person I 'lent' the money to did write me other IOU letters promising to repay it in monthly instalments but when he failed to start those repayments I took him to the small claims court. Who issued a repayment order on them.
  Unfortunately again a similarity because, as we discovered, they hadnt been paying their 'share' of the rent all 3 of us tenantsd got chucked out (even though 2 of us were up to date with the rent). With that they moved and we have been unable to trace them. We suspect they are still living / working locally as they have a relationship with children involved. However as someone mentioned above until we can find out a new address either of residence or work conected to them we are powerless!
  I have been to the local police station in the past, and the library records to try and find a way of tracing them but to no luck so far.
  One day I will hopefully hear news ofthem being around again and then I can find a way to get my savings back.
  I can certainly say I have and continue to pay for my stupidity. The money has gone for good (should I ever get it returned it would be like winning the lotterey I feel) I have accepted there is no point in chasing a lost cause now.
  We didnt get the honeymoon we planned and I saved for, I didnt even get any wages as they were lent as well (this so called 'loser of a friend' shared a flat with my then fiance and I and we worked together)
  I later discovered all my money was being bet on horses and poured into games machines therefore I was fuelling their betting and alcohol addiction! We couldnt see this as ofter they hadnt returned home until early hours so we wernt awake to see them rolling in drunk every time. I also eventually ended up repaying a bank loan this person had as they used me as a guarantor!
  SO to recap this individual maggott owes me rent, wages, money lent, and a personal loan. All accumilating intrest from the courts on a daily basis. Yet I have NO hope of ever seeing them or my money again. UNLESS someone out there knows of their whereabouts or of a way to track them down (or a private detective who wants a charity case).
  I pay for it every year as life continues to get tougher and every anniversary I get reminded how I screwed up our honeymoon.
  Sorry to hear of your similar plight I do feel for you from personal experience and I too feel powerless.
  My advice though is move on and dont ever trust anyone again, no matter how much you think you csan trust them. Rebuild your savings and be thankful its another life experience you durvived!
  Thanks for listening, it always helps to get it of my concience once in a while.
  Keep me updated on how things progress, but dont get obsessed with it.
• I feel so sorry for you - my poor sister went through exactly the same thing. Lent quite a lot of money to a boyf who actually texted to tell her he wasn't paying her back. She went through all sorts of legal advice (citizens advice, police and a solicitor) and they all said the same things as have already been posted here - in other words, forget it. You do learn a lesson, but you really learn it the hard way. So, sorry, but maybe the saying "what goes around, comes around" is true ...
• Sadly I think you may have seen the last of your money. You've received lots of good advice, and maybe if you find this person, they'll see sense and do the decent thing.
  Don't despair, you were not a fool, it's heartening to hear from people who have enough faith in people to lend their hard earned cash. It's gut wrenching that your trust has been abused this way, but PLEASE don't let it make you mistrustful of everyone, as most people are decent and wouldn't behave so appallingly.
  Good luck, and let us know how you get on.