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Thomas, Lawyer
Category: UK Law
Satisfied Customers: 7600
Experience:  BA (Hons), PgDip, Practising Solicitor
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What rights do people have, if they loan out money to a relative

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What rights do people have, if they loan out money to a relative with no agreement to pay it back


Was the transfer of money understood to be a loan as opposed to a mere gift and do you have documentary proof of this (eg. email, text message etc).


What is the value of the sum of money involved?




Customer: replied 6 years ago.
Hi Tom, The money is approx £4,300 no documentation of any kind.


Was it understood by both parties to be a loan and not a mere gift?


Was there an understanding of the term of repayment?


Customer: replied 6 years ago.
Yes, There was understanding of repayment of £100 a month.

Right. Have they defaulted on those repayments?


Customer: replied 6 years ago.

If they have defauled then you can seek to claim the money from them. A contract can be oral, it need not be expressed in writing. Any documentary evidence acknowleding the loan status of the arrangement will be helpful.



You should write a formal letter to them stating the details of the loan and that you require the money to be paid back (or an amended repayment plan suggested) within a reasonable time (eg 7-14 days). State that you are prepared to issue a claim at Court for the outstanding monies if necessary.


If this does not illicit a response you should ask a solicitor to draft a Letter Before Action to her. This will be cheap and may bring home your commitment to recovering the money to them.


If no response is received then you can issue a claim yourself through Her Majesty's Courts Service's online service . It's very straightforward to use and pretty cheap. Again, they may at this point relent and offer to repay the money. I would have thought that it would be worth doing even if you do not have any documentary evidence that is was in fact a loan since it is an inexpensive way forward and it may not actually go to Court if they see sense, acknowledges and suggested a form of repayment.


HMCS's website contains lots of useful information for issuing a claim yourself:-


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Kind regards,



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