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Thomas, Lawyer
Category: UK Law
Satisfied Customers: 7602
Experience:  BA (Hons), PgDip, Practising Solicitor
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Hi I have made a number of loans totalling about £8,000

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I have made a number of loans totalling about £8,000 to a friend who is self-employed. The loans were spread out over approximately two years in an effort to keep him in business. The understanding was that the loans would be repaid as soon as the next cheque came into the business. So far my requests for repayment have been ignored. What options are open to me to try and recover the debt.

Many thanks.


You refer to the loans becoming payable " soon as the next cheque came into the business", what was meant by this and has this now happened?

Customer: replied 4 years ago.

Hi Tom


In total there were six separate loans over a period from mid 2010 to mid 2011. Money came into his business on a regular basis. But unfortunately it was used to pay for business purposes which always took priority. It appears that if he had made a substantial repayment to me, it could have put him out of business. Therefore I have never received any repayments. He is only one year from retirement age and he does have equity in his house which he owns jointly with his wife.




Hi Terry

Thanks for your patience.

An understanding like this in respect of monies loaned is certainly capable of forming the basis of an action in contract, it is an oral contract and therefore actionable.

The question therefore becomes whether your friend has breached your agreed repayment terms for each loan. If they have then you can commence an action against them on the basis of the breach.

You have to obtain judgement against him to enforce against the equity in the

You should write a formal letter to him stating the details of the loan and that you require the money to be paid back (or a 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 comittement to recovering the money.

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, he 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 he sees sense, acknowledges and suggested a form of repayment.

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Kind regards,