lent a friend money, now cant pay it back, What to do?
Discussion
So I would like peoples thoughts on this, a old friend owes me £50k which I lent to him 18 months ago to start a business, I have a PG from him for this. It was supposed to be a 6 month loan but he has not been able to pay it back. For the last 4 months its been tomorrow, tomorrow tomorrow every day.
Now this issue is I know he does not have the money. It looks like he found a get rich quick scheme and decided to try that around 5 months ago and I believe he has lost the money and without this money the business looks to have sunk.
I have given him unit the 31st to get the money back but I am really in 2 minds what to do, I can force the sale of his house but he has 4 kids and he would have them taken away from him (they are foster kids) if he did not have a home.
I am in 2 minds, he has fallen on hard time but due to his own stupidity. I have my own mortgage and family and can not just throw away £50k also but its not going to make me homeless without it.
Now this issue is I know he does not have the money. It looks like he found a get rich quick scheme and decided to try that around 5 months ago and I believe he has lost the money and without this money the business looks to have sunk.
I have given him unit the 31st to get the money back but I am really in 2 minds what to do, I can force the sale of his house but he has 4 kids and he would have them taken away from him (they are foster kids) if he did not have a home.
I am in 2 minds, he has fallen on hard time but due to his own stupidity. I have my own mortgage and family and can not just throw away £50k also but its not going to make me homeless without it.
Edited by TheBMWDriver on Sunday 14th December 08:31
Actually I am not fussed about the friendship part, he was never a close friend but more someone I would meet every year.
Its more I do not want to be a hard ass and make him homeless but on the other side he was a fool and should have never lost the money in the first place.
EDIT: Yes the above is a option.
Its more I do not want to be a hard ass and make him homeless but on the other side he was a fool and should have never lost the money in the first place.
EDIT: Yes the above is a option.
Find out for certain how he lost it (if possible). If he failed to use the money for the business and blew it on something (anything) else then it's fine in my eyes to force the money out of him. If he just wasn't able to make the business work then allow him to pay it back in installments.
Actually the business worked well, he made a little under a £100k in a year but the summer was a slow period without any orders.
So he "invested" the money into some sort of property scheme in Dubai that promised him 14% return in 3 months. I found out and told him to put a end to it and get my money back. He tried and when the money was sent back his accounts have been frozen and he is now being investigated.
Massive levels of stupidity as he could have built a long term business with what he was doing.
So he "invested" the money into some sort of property scheme in Dubai that promised him 14% return in 3 months. I found out and told him to put a end to it and get my money back. He tried and when the money was sent back his accounts have been frozen and he is now being investigated.
Massive levels of stupidity as he could have built a long term business with what he was doing.
TheBMWDriver said:
Actually the business worked well, he made a little under a £100k in a year but the summer was a slow period without any orders.
So he "invested" the money into some sort of property scheme in Dubai that promised him 14% return in 3 months. I found out and told him to put a end to it and get my money back. He tried and when the money was sent back his accounts have been frozen and he is now being investigated.
Massive levels of stupidity as he could have built a long term business with what he was doing.
I might be inclined to get the debt secured against his property ASAP. Possibly you could say that if he agrees to a legal charge against his house you'll allow him some more time, if not you want it immediately.So he "invested" the money into some sort of property scheme in Dubai that promised him 14% return in 3 months. I found out and told him to put a end to it and get my money back. He tried and when the money was sent back his accounts have been frozen and he is now being investigated.
Massive levels of stupidity as he could have built a long term business with what he was doing.
He might be able to re-mortgage out your money.
The "investigation" thing doesn't sound good though; it might be the case that a government agency could trump you when it comes to recovering money.
He needs to release equity in his house, or move to a cheaper house, if you want instant return. Both will need a steady income stream to sort out the mortgage. If his accounts are frozen I guess that getting a mortgage will be impossible, so as you say, you can only force the sale. Will he lose the foster kids, or will social services very quickly sort him out ? Whilst he has the kids and is living where he is, at least he's not left the country.
I guess that a payment plan over 10 years with a reasonable and fair interest rate will work better, but he may need a few months grace before paying anything. It's your choice.
You could offer to take equity (100%?) in his business and or his house in exchange for wiping off the debt. The business might have a seasonable sales profile, but it might be a gold mine in the longer term.
The equity in the house would require him to pay you rent for your proportion of the house, but is more LONG term. You need him to move to get that money back.
I guess that a payment plan over 10 years with a reasonable and fair interest rate will work better, but he may need a few months grace before paying anything. It's your choice.
You could offer to take equity (100%?) in his business and or his house in exchange for wiping off the debt. The business might have a seasonable sales profile, but it might be a gold mine in the longer term.
The equity in the house would require him to pay you rent for your proportion of the house, but is more LONG term. You need him to move to get that money back.
DSLiverpool said:
He has a good business that makes £100k, start it up with you as the owner and he works the cash back then give him equity ?
this.Or, if not, and you really want you cash, start forcing him to sell his assets (car's TV's etc....) it then depends on how it will affect his family. Of course, if he is smart, he would declare bankruptcy and have the debt written off. Not sure how that would look in the eyes of the Foster guys though (social service?)
If the money was to start a business it doesn't connect that it ended up in Dubai on a dodgy get-rich-quick scheme. It seems to me that his mentality was - 'woo, free money, let's gamble with it'.
Did you have any kind of written agreement/contract?
I doubt he will ever pay it back the proper way; you just have to decide how tough you want to be. But here's a clue - the moment you start being nice, you will lose. And if other people are after the money, act before they do. Good luck.
Did you have any kind of written agreement/contract?
I doubt he will ever pay it back the proper way; you just have to decide how tough you want to be. But here's a clue - the moment you start being nice, you will lose. And if other people are after the money, act before they do. Good luck.
Edited by Simpo Two on Sunday 14th December 11:06
Personally, I would get tough and try and get your money back. If it was £5k you'd write it off, but £50k is a serious wedge for anybody. If he gave you a personal guarantee then he should have known the consequences of that. Then again, if he's the kind of guy that falls for a get rich quick scheme, then you were probably on a loser from the start.
If you don't want to make him homeless, and you don't need the money in a hurry, then a phased payments scheme is worth a try, but on the strict understanding that if he defaults then you will take action to force him to sell his house.
Does he actually have any equity in his house? If he does, it begs the question as to why he needed to borrow money from you in the first place, when interest rates are so favourable....
If you don't want to make him homeless, and you don't need the money in a hurry, then a phased payments scheme is worth a try, but on the strict understanding that if he defaults then you will take action to force him to sell his house.
Does he actually have any equity in his house? If he does, it begs the question as to why he needed to borrow money from you in the first place, when interest rates are so favourable....
How do you know he hasn't just remortgaged his house and he has nothing?
He may just go bankrupt and you will get nothing.
Personally id take legal action straight away and try to get my money back asap although I feel you may never get it back. If he could remortgage then wouldn't he have done this by now?mwouldnt he have done this in the first place?
You agreed 6 months. It's been 18.
You're being taken for a MUG?
He may just go bankrupt and you will get nothing.
Personally id take legal action straight away and try to get my money back asap although I feel you may never get it back. If he could remortgage then wouldn't he have done this by now?mwouldnt he have done this in the first place?
You agreed 6 months. It's been 18.
You're being taken for a MUG?
Thanks for the feedback people, so he cant start the business again because it would need around £150k to get it going again and no one including me will give that to him.
He cant get a mortgage because he is unemployed now and is in the process of being investigated for god knows what. However he has managed to secure a decent job starting next year. He was actually CEO of a decent company before he left to start up his own business.
We have agreed that if the accounts are unfrozen by the end of the year he will get all the money back to me, if not he will pay me interest ever month until he manages to get the cash back to me. If he misses a payment I will take steps to recover the payment by having his house sold off.
I am also going to take his car .
He cant get a mortgage because he is unemployed now and is in the process of being investigated for god knows what. However he has managed to secure a decent job starting next year. He was actually CEO of a decent company before he left to start up his own business.
We have agreed that if the accounts are unfrozen by the end of the year he will get all the money back to me, if not he will pay me interest ever month until he manages to get the cash back to me. If he misses a payment I will take steps to recover the payment by having his house sold off.
I am also going to take his car .
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