Loan between friends - lawyers?
Discussion
I need a bit of advice to give to a friend about a 'loan' deal between himself and another friend.
Long story short, Person A has offered to in effect pay person B's mortgage. Person A quite wealthy, and is quite a succesful businessman and has decided to help him out by paying his mortgage!
What he has said is, he wants for example 20k up front he will then pay whatever the mortage payment was calculated at per month (quite a large mortgage!) At the end of 2 years, he can either have his 20k back, or carry on with having the interest paid + 10k every two years!
That's how I understand it anyway
Obviously it sounds a bit strange, but as far as im told it's all legit.
Person A has had a loan agreement typed up with solicitors information etc on it which is meant to be incase anything happened to him, person B could get his money back?
What I need to know is what protection does this person have, or what should person B be looking to do before handing over a big lump of cash!
Any advice you can offer would be great so that I can pass it on!
pm me if you like,
Thanks
Long story short, Person A has offered to in effect pay person B's mortgage. Person A quite wealthy, and is quite a succesful businessman and has decided to help him out by paying his mortgage!
What he has said is, he wants for example 20k up front he will then pay whatever the mortage payment was calculated at per month (quite a large mortgage!) At the end of 2 years, he can either have his 20k back, or carry on with having the interest paid + 10k every two years!
That's how I understand it anyway
Obviously it sounds a bit strange, but as far as im told it's all legit.
Person A has had a loan agreement typed up with solicitors information etc on it which is meant to be incase anything happened to him, person B could get his money back?
What I need to know is what protection does this person have, or what should person B be looking to do before handing over a big lump of cash!
Any advice you can offer would be great so that I can pass it on!
pm me if you like,
Thanks
I've seen the contract that was drawn up, it seemed pretty detailed + professional with witness signatures and loan terms etc, although I could easily make one on word if I wanted to!
There is a clause in there that if payments are not made on time he needs to pay base rate + 5% or something? But I wasn't sure how enforcable something like that was!
Ah well, I'm sure he'll sort something out!
There is a clause in there that if payments are not made on time he needs to pay base rate + 5% or something? But I wasn't sure how enforcable something like that was!
Ah well, I'm sure he'll sort something out!
I'd recommend a solicitor's involvement (one acting for person B and looking out for his interests).
The first thing I would do is to ask the solicitor to investigate how to place a charge over some/all of person A's assets so that, in the event he goes bankrupt, the money is still repayable.
It is a very strange arrangement. There may also be tax implications, so an accountant may be useful here, too.
The first thing I would do is to ask the solicitor to investigate how to place a charge over some/all of person A's assets so that, in the event he goes bankrupt, the money is still repayable.
It is a very strange arrangement. There may also be tax implications, so an accountant may be useful here, too.
skwdenyer said:
I'd recommend a solicitor's involvement (one acting for person B and looking out for his interests).
The first thing I would do is to ask the solicitor to investigate how to place a charge over some/all of person A's assets so that, in the event he goes bankrupt, the money is still repayable.
It is a very strange arrangement. There may also be tax implications, so an accountant may be useful here, too.
Yeah talking to a solicitor is probably his best bet.The first thing I would do is to ask the solicitor to investigate how to place a charge over some/all of person A's assets so that, in the event he goes bankrupt, the money is still repayable.
It is a very strange arrangement. There may also be tax implications, so an accountant may be useful here, too.
I think the reason it was set out as a loan with repayments was to avoid any income tax as opposed to just receiving payments?
I think I'll tell him to get some legal advice and leave him to it r
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