I am helping a friend by loaning him some money. He is struggling with large debts but cannot take any action to resolve the situation properly until his divorce financial settlement is sorted. His solicitor has advised signing a loan agreement to make it clear that this is a short term loan to tide him over and not a gift that becomes part of whatever is being split IYSWIM.
A kind MNetter has shared a loan agreement she has used (checked over by another solicitor MNetter) but I have a question and hope somebody can advise.
I know he will repay the money under normal circumstances but my only concern is in the event of his death (obviously unlikely but still possible). If there are no assets at all would debts be paid out of insurance/death in service payout or would all that go to the named beneficiaries and the debts just have to be written off. If there are no assets to secure the loan against is there a clause needed in the loan agreement to cover this and if so, what? Or, conversely, is there no way around it and the money just lost if the worst happened.
Thanks in advance
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Loan Agreement question - can anybody advise me please?
3 replies
Tranquilidade · 17/01/2012 21:54
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