Lending money to family and friends – what should I do?
At some point in your life, it is quite likely that a family or friend has asked you if they can borrow money. Sometimes, it’s £10.00 so they can pay for shopping, or food, but other times, they could ask for far more. In instances where, for example, you are loaning a large sum of money to a parent or child, there are legal considerations that should be taken into account before you do so to ensure you are protected.
The most important consideration is how the law views this transaction. There is a presumption that where one loans money to another, where both parties are family or friends, there is no obligation to repay that amount of money. That presumption can be challenged with evidence, and can be used to persuade a court that you are entitled to your money back, and in some cases, with interest. There are many cases involving exactly these situations, and each scenario must be taken individually and assessed on its facts.
In the scenarios most often encountered by our dispute resolution team, the money has already been loaned, and a default in repaying that sum has happened, meaning we are often relied upon to recover that debt without any formal agreement in place. The aim, therefore, in these situations is to obtain a swift and cost-effective resolution to recovering your money and, where you do need to use the courts, to do so in a manner that suits your circumstances.
It is a common myth that a contract must be in writing and signed by everyone in order for money to be recovered. A contract can come into existence in a multitude of ways, and can be legally enforced. The scenarios involving family and friends can be hostile, but we have a proven track record of settling disputes early, and recovering money that you are owed.
If you are facing difficulty in recovering money that you are owed by a family member of friend, or perhaps you are being asked to repay an amount of money that was given to you, our team can advise you on your position, and what you should do. Our specialist contract litigation lawyer, Daniel Tetsell, is able to offer you practical steps and, if needed, help in court, and would be happy to discuss your situation. Daniel may be contacted on 01905 730462 or email@example.com.