Personnal Loan to a friend
Discussion
A friend of mine's family has come totally stuck for cash on very short notice. Basically they are about to get evicted on tuesday, and need to come up with cash. Father has lied to family and effectively hidden the problem, which has now hit them all with full force. They are on final notice, and will be evicted.
Is it possible to loan money to my friend, (who will then give money to their family) and protect myself against loosing this money. Friend earns circa 32k with 2k of debts.
I'd like to help out, but certainly don't intend to do it without protecting myself.
Are there any other options of raising decent amounts of cash in a short period of time?
Collective thoughts, are appreciated as ever!
Is it possible to loan money to my friend, (who will then give money to their family) and protect myself against loosing this money. Friend earns circa 32k with 2k of debts.
I'd like to help out, but certainly don't intend to do it without protecting myself.
Are there any other options of raising decent amounts of cash in a short period of time?
Collective thoughts, are appreciated as ever!
I've just done this for a friend of my wife's, he's hit hard times and needs the deposit money for a house, council will help him with rents. He's got 3 kids under 5 and I can't see them be homeless (he's been lodging with friends and living part time in a caravan). In my mind the money's just been written off, maybe he'll pay some back in the future, maybe help out here and there, maybe not!
IF you're going to do it then just assume that you'll never see it again.
davidy
IF you're going to do it then just assume that you'll never see it again.
davidy
evicted?
Have they got a court order for possession agaisnt them? If not they are not being evicted. If they do then they have to leave even if they pay off the debt.
Have they got notice requiring possession? this is not an eviction notice and paying off the debt may resolve it. It may not though.
If you can find out what exatly they have been sent then more specific advice can be given.
Loans to a friend, only you know if you can trust them to pay it back.
Have they got a court order for possession agaisnt them? If not they are not being evicted. If they do then they have to leave even if they pay off the debt.
Have they got notice requiring possession? this is not an eviction notice and paying off the debt may resolve it. It may not though.
If you can find out what exatly they have been sent then more specific advice can be given.
Loans to a friend, only you know if you can trust them to pay it back.
You can draw up an Loan Agreement with the other side. This should show how much is being borrowed, any Interest charged, and crucially when the loan has to be repaid by. Now this on its own will not ensure you get repaid, but it will allow you to get judgement against the other side if it ends up in court.
That said if the guy is that strapped for cash you will not see your money again, even with a CCJ.
That said if the guy is that strapped for cash you will not see your money again, even with a CCJ.
DavidY said:
I've just done this for a friend of my wife's, he's hit hard times and needs the deposit money for a house, council will help him with rents. He's got 3 kids under 5 and I can't see them be homeless (he's been lodging with friends and living part time in a caravan). In my mind the money's just been written off, maybe he'll pay some back in the future, maybe help out here and there, maybe not!
IF you're going to do it then just assume that you'll never see it again.
davidy
What a wonderful thing to be able to do. If the OP goes into this with a similar view, and can be sure his help is not merely a temporary fix then he should IMOIF you're going to do it then just assume that you'll never see it again.
davidy
I'd agree with most of the above, people who are only £2k in debt do not get evicted. *Usually* mortgage/rent debt is the last to be incurred *usually* folks have run up large credit card bills that allow them to pay the rent before this time so you need to take a long hard look at what the correct picture is. I would be absolutely amazed if there are only £2k of debts.
If you want to help them out, then do, it's a very kind thing for you to do - don't bank on getting the money back though.
On a practical note is this Mortgage arrears or rental arrears? I'm guessing rental so private landlord or social landlord? Depending on area/property I reckon that's only around 3 month's worth of rent? Or is it a longer term default?
Assuming it's rental, as mentioned above, the landlord needs to have got a Possession Order from the local County Court, your friend will have had notice of this (but has probably ignored it) if they had notice and didn't attend it's likely the Landlord has a Possession Order (although I managed to lose a case even when the tenant didn't show on one occasion!).
If there is a Possession Order, your friend can apply to the Court for another hearing and can ask for the Order to be suspended to enable him to pay the debts. If it's a social Landlord this is pretty much guaranteed - they will get the PO suspended on the basis that they pay the rent and the arrears - usually at a very minimum amount (£3 per week). If it's a private landlord, there is a posibility that they will get the order suspended but it will very much depend on their own situation (young kids, good reason for arrears, arsey District Judge...). In any case they should ask to speak to the Duty solicitor at the County Court - on housing list day there is often someone in who is familar with these issues.
If there isn't a Possession Order tell the Landlord to sod off as what he is doing is illegal and can lead him paying compensation to the Tenant if he changes the locks, turfs them out etc.
BUT your friend must deal with the debt issue or the Landlord will be back in two months with a Possession Order and your friend will be out (better chances with social landlord).
These things do not come about at short notice - your friend is almost certainly lying about the nature of the debts.
Send them in the direction of the CAB or a similar FREE debt service, try and help them to deal with the debts, just throwing money at them is not necessarily enough although I admire you for being prepared to put your hand in your pocket and help.
If you want to help them out, then do, it's a very kind thing for you to do - don't bank on getting the money back though.
On a practical note is this Mortgage arrears or rental arrears? I'm guessing rental so private landlord or social landlord? Depending on area/property I reckon that's only around 3 month's worth of rent? Or is it a longer term default?
Assuming it's rental, as mentioned above, the landlord needs to have got a Possession Order from the local County Court, your friend will have had notice of this (but has probably ignored it) if they had notice and didn't attend it's likely the Landlord has a Possession Order (although I managed to lose a case even when the tenant didn't show on one occasion!).
If there is a Possession Order, your friend can apply to the Court for another hearing and can ask for the Order to be suspended to enable him to pay the debts. If it's a social Landlord this is pretty much guaranteed - they will get the PO suspended on the basis that they pay the rent and the arrears - usually at a very minimum amount (£3 per week). If it's a private landlord, there is a posibility that they will get the order suspended but it will very much depend on their own situation (young kids, good reason for arrears, arsey District Judge...). In any case they should ask to speak to the Duty solicitor at the County Court - on housing list day there is often someone in who is familar with these issues.
If there isn't a Possession Order tell the Landlord to sod off as what he is doing is illegal and can lead him paying compensation to the Tenant if he changes the locks, turfs them out etc.
BUT your friend must deal with the debt issue or the Landlord will be back in two months with a Possession Order and your friend will be out (better chances with social landlord).
These things do not come about at short notice - your friend is almost certainly lying about the nature of the debts.
Send them in the direction of the CAB or a similar FREE debt service, try and help them to deal with the debts, just throwing money at them is not necessarily enough although I admire you for being prepared to put your hand in your pocket and help.
Clearly I'm awful at describing the situation so I'll try again...
The family owe 18k, in arears. Its something like 170 mortgage on a 190 house. So not a lot of equity to play with.
My friend is trying to help parents out, friend has only 2k of borrowings but can't get more before deadline. or so they think.
by the sounds of it though, there's not a lot i can do.
The family owe 18k, in arears. Its something like 170 mortgage on a 190 house. So not a lot of equity to play with.
My friend is trying to help parents out, friend has only 2k of borrowings but can't get more before deadline. or so they think.
by the sounds of it though, there's not a lot i can do.
agree with Watts the friend isn't the issue the family are.
I'd be wanting more detail on the what and how before lending and then i'd very very cautious but then if it were me I wouldn't want to get involved especially if the debt is built up of plasma TV's, store cards and holidays!!
I'd be wanting more detail on the what and how before lending and then i'd very very cautious but then if it were me I wouldn't want to get involved especially if the debt is built up of plasma TV's, store cards and holidays!!
Edited by atom111 on Friday 16th November 13:01
OK on the new scenario, there is £18k of mortgage arrears? Yes? or £18k debts generally including mortgage arrears?
If only mortgage debt then TBH the same comments apply - this is usually the last area of debt.
As James said above, you can draw up a very simple loan agreement. I don't have a precedent but you need to deal with interest - whether it will be paid, what rate it would be charged at (I'd suggest something like 2-4% above the base rate of a named bank). Deal with when the money will be repaid - will he pay you monthly? Will there be a long stop date when he must repay?
Write it down, both of you sign it. You should then have something that will demonstrate the debt and the intentions of the parties in the future but as said if he doesn't pay your options are pretty limited in the future without chucking more money at this.
Have they spoken to the Lender about them accepting smaller payments? Ditto any other credit card debt.
If only mortgage debt then TBH the same comments apply - this is usually the last area of debt.
As James said above, you can draw up a very simple loan agreement. I don't have a precedent but you need to deal with interest - whether it will be paid, what rate it would be charged at (I'd suggest something like 2-4% above the base rate of a named bank). Deal with when the money will be repaid - will he pay you monthly? Will there be a long stop date when he must repay?
Write it down, both of you sign it. You should then have something that will demonstrate the debt and the intentions of the parties in the future but as said if he doesn't pay your options are pretty limited in the future without chucking more money at this.
Have they spoken to the Lender about them accepting smaller payments? Ditto any other credit card debt.
Edited by Piglet on Friday 16th November 13:07
LewisTintin said:
Clearly I'm awful at describing the situation so I'll try again...
The family owe 18k, in arears. Its something like 170 mortgage on a 190 house. So not a lot of equity to play with.
My friend is trying to help parents out, friend has only 2k of borrowings but can't get more before deadline. or so they think.
by the sounds of it though, there's not a lot i can do.
In that case the sh1t is about to impact. Wait till the dust settles then help em with a deposit for a rental or bridging loan tied to the equityThe family owe 18k, in arears. Its something like 170 mortgage on a 190 house. So not a lot of equity to play with.
My friend is trying to help parents out, friend has only 2k of borrowings but can't get more before deadline. or so they think.
by the sounds of it though, there's not a lot i can do.
Piglet said:
OK on the new scenario, there is £18k of mortgage arrears? Yes? or £18k debts generally including mortgage arrears?
As James said above, you can draw up a very simple loan agreement. I don't have a precedent but you need to deal with interest - whether it will be paid, what rate it would be charged at (I'd suggest something like 2-4% above the base rate of a named bank). Deal with when the money will be repaid - will he pay you monthly? Will there be a long stop date when he must repay?
Its all pretty new info to me right now. At present it looks like mortgage debt, rather than money been blown on junk. Father's work not been going well and taking out of the home and kept it quiet from the family. As James said above, you can draw up a very simple loan agreement. I don't have a precedent but you need to deal with interest - whether it will be paid, what rate it would be charged at (I'd suggest something like 2-4% above the base rate of a named bank). Deal with when the money will be repaid - will he pay you monthly? Will there be a long stop date when he must repay?
Edited by Piglet on Friday 16th November 13:07
I'm not that flush with cash that it wouldn't be easy for me to do this. So its looking a little difficult.
Are there not companies that loan money same day, up to 10k? (other than ur Soprano types..)I'm not that wise to the whole situation.
In regards to the eviction. Apparantly he's been to court a few times, and just not said anything until now. Tuesday is the final day. I can't understand how people let this happen. Its really very sad.
Sadly people let this happen as they feel that they can't discuss it, that they are a disappointment to their families etc. etc. It doesn't help with the long term but I can see how it happens I have a lot of sympathy. There are some dreadful outcomes of debt cases that I think are fairly close to mainly longstanding PHer's.
Personally, I wouldn't throw money at this, I think your £2k and your friend's money will get sucked into a black hole never to be seen again. The family will not have enough money to get back on their feet and this will crisis again in c. 6 months time and all they will have to show is more debt.
I would give my time, support and my understanding and try to help them work through this. They need to get some proper advice - the CAB is fine, but they need to do it NOW. There might be a way to stave off the eviction and the CAB will help look at all of the debt and to help to work out whether there is a way through this. If there isn't a way through this the CAB will help the family to work out the best next steps - it might be an IVA, it might be bankruptcy. They will help to take the pressure off the family and will try to ward off the creditors where possible.
Good luck, we've just managed to get ourselves fairly debt free after debts incurred whilst OH was redundant. It's a bloody awful place to be when you know that things are only get worse.
Personally, I wouldn't throw money at this, I think your £2k and your friend's money will get sucked into a black hole never to be seen again. The family will not have enough money to get back on their feet and this will crisis again in c. 6 months time and all they will have to show is more debt.
I would give my time, support and my understanding and try to help them work through this. They need to get some proper advice - the CAB is fine, but they need to do it NOW. There might be a way to stave off the eviction and the CAB will help look at all of the debt and to help to work out whether there is a way through this. If there isn't a way through this the CAB will help the family to work out the best next steps - it might be an IVA, it might be bankruptcy. They will help to take the pressure off the family and will try to ward off the creditors where possible.
Good luck, we've just managed to get ourselves fairly debt free after debts incurred whilst OH was redundant. It's a bloody awful place to be when you know that things are only get worse.
Edited by Piglet on Friday 16th November 13:24
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