Repayment of loan
I lent a relative some money a year ago. He promised to provide a loan agreement signed by him and his wife, who are joint owners of their property which is for sale, saying the loan would be repaid straight after the house is sold. I have been putting pressure on him to provide the promised agreement but he has been prevaricating. I provided a document for them both to sign and have witnessed but he has not returned it. Instead he has emailed me a draft "debt acknowledgement" which he proposes to sign himself. He says that it will be a couple of more weeks before he can provide any kind of document with his wife's signature on, although he maintains she is now aware of the debt. I don't know if this "debt of acknowledgement" is worth anything when only he proposes to sign it, and am puzzled as to why he has sent it to me. I am not sure of the legal implications and would be grateful for some advice. Is there a time limit beyond which they would not have to repay the loan. Their property is grossly over priced, has already been on the market for five years and could remain unsold for a very long time.
your rights to pursue the
your rights to pursue the debt will come to an end six years after the debt fell due.
Was the loan to both of them or just him. Before agreeing to allow the repayment to be deferred you should make sure there is enough equity to pay it and that he will be getting some. it would help if his wife signed so that it is harder for her to back out of the debt. Without seeing the document he has prepared I cannot say what effect it will have. What a court will look at if it comes to that is evidence to show that the loan was made , how much it was , when it was made and what the terms are for repayment.
Any document therefore needs to reflect as closely as possible your understanding of the terms.It is all about evidence, essentially the paperwork for any loan is evidence of the terms that were agreed when the loan was made.
Richard Paremain
repayment of loan
Many thanks. The draft document he has sent me says:
I ----------hereby acknowledge that on 17 February 2011 the undernoted persons ( ie me and two siblings) gave me cash loans of £2800 each. The amounts are to be repaid, with interest of 4% within one week of the sale of ---------which property is currently on the market for sale.
The loans were made without his wife's knowledge, but he says she is now aware of them. I suspect she is refusing to sign anything, as he says the debt acknowledgement is an interim measure for a couple of weeks until he can get her to agree to sign the loan agreement drawn up by me.The loan agreement I sent to him is worded as follows. "We the undersigned agree, jointly or seperately, to repay the sum of £2800 plus 4% interest to -------. Repayment to be made within one week of the receipt of proceeds of completion of the sale of ------------. If the property is not sold then repayment remains due". Please can you advise on the wording of my document, perhaps I should add that if there is not sufficient equity in the property, the amount remains due? My concern is the certain knowledge that if anything happened to him I would not be repaid by his wife.Thanks again.