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Thread: Court Action Personal Loan Interest?

  1. #1

    Court Action Personal Loan Interest?

    Hi,

    I'm presently in the process of taking someone to court over an unpaid personal loan between two individuals.

    I understand that I can reclaim interest and there is a set calculation for this.

    I am not very clear on what the date would be to claim this interest from?

    The amount to be repaid is 6500 and this amount was paid to the individual over 7 separate payments- each on different dates within a short time period.

    The first loan date was in April 2015.

    The person has already paid back a large portion of the original loan so do I just claim interest on the outstanding balance from the first loan date or from the date it should have all been paid back?

    Or am I to calculate from each of the 7 separate dates?

    I'd really appreciate any advice on this as I want to try and keep my claim to the letter as much as possible.

  2. #2
    OK first of all do you even have a legally enforceable agreement in place? If the loan was between friends/family with nothing written down then basically forget the money, you'll not stand a chance of enforcing the loan through court.

    In order for a loan to be enforceable, especially one between friends and family which are notoriously hard to enforce, it needs to include the amount lent, the rate at it is to be paid back at, the date it is to be repaid by, the costs for the borrowing (the interest you'll be adding on), the total amount to be repaid and any penalties for missed payments.

    If you lend someone money and you don't put down the date it needs to be repaid by then legally they have forever to repay it.

    If you lend someone money, agreed between you monthly payments but not written that part down, and are trying to claim before the date the loan has to be repaid by then a claim will fail until the date it has to be repaid by is reached.

    Now assuming you've an enforceable one Statutory Interest you're thinking of only applies to commercial debts, i.e when an individual owes money to a business or a business owes you money and it applies from the date the money is owed, not when the claim is filed. With a personal loan between two private individuals you cannot claim interest unless you stated in the terms of the loan that if they defaulted there would be interest applied. You cannot claim for anything you've not stated in the terms and conditions of the loan.

  3. #3
    Where would I stand with written proof of a set monthly payment?
    We did not set an end date but with a set monthly installment would that apply as an end date?

    Also, the person did agree (in writing) to pay back a set lump of interest on the overall debt.

    My aim going forward was to just disregard that interest as I felt that would be better looked upon by the court.

    Should that interest still apply and would I be taxed on it?

  4. #4
    Do you have a consumer licence to lend and charge interest?
    If not it will be easy for them to get the case thrown out of court.

    Go for the capital amounts outstanding and ask the court to award costs.

  5. #5
    Was the rate of interest set out and the amount payable also set out in writing as well? If not then that is viewed as an unfair term of contract and therefore unenforceable because the person cannot know what the interest rate is in order to make a decision of whether it is a good deal or not.

  6. #6
    The only thing the court will be concerned with is if you have a legally enforceable agreement and that the terms of that agreement have been broken. Whether or not you disregard the interest makes no difference to your success, it all hangs on what was written down and signed for. As you're not a commercial body and nor is the other party then statutory interest can't be claimed. If it can be then the court will automatically calculate it for you so I would not overly concern yourself with it.

    Without knowing exactly what was put down in writing its hard to say whether or not you have an enforceable claim.

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