"friend" defaulted on loan and is avoiding me

[airedailleurs]

Would really appreciate some advice here:

• a few months ago a work colleague was really distressed as bailiffs were outside her house waiting to enter and take her things unless she repaid a debt.

• I was really concerned for her as she has a young daughter and lent quite a large (4-figure) sum of money, and we both signed a loan agreement printed off from a legal website on internet, whereby she agreed to repay me £200 per month (she suggested the amount) by direct debit.

• after only 3 months she cancelled the direct debit because £700 of unpaid council tax was deducted from her salary (the council concerned had arranged this with our employer)

• she then arranged for this unpaid council tax to be repaid £100 each month, and started to pay me back again, this time at £100 per month, which already contravened the terms of our loan agreement but I was ok with this due to the council tax, but thought it odd that she hadn't mentioned this outstanding council tax debt to me.

• She did not re-establish the direct debit and has paid me a total of £700 since receiving the loan, with me having to request the money from her each month.

• I resigned from my job in July so we no longer see each other at work, but until this morning we were facebook friends and were in touch this way. I have been trying to contact her to see if she was in a position to make the payment due on 31st August, but she hasn't responded to my messages and has now "unfriended" me on facebook.

• I can't believe that someone I thought was a friend would behave in this way; I have been nothing but generous and understanding with her. As she is not responding to my attempts to contact her to discuss an amicable way forward, do you think it's unreasonable to take legal action against her?

Would appreciate your views please.

Sue her ungrateful thieving arse!

How much does she owe you? You can take her to small claims, but all this smacks of your "friend" having a chaotic and head in the sand attitude to money, so don't be surprised if you find yourself in a long queue of unsecured creditors.

wow thanks for the quick replies!
I am really in shock that someone could do this, and yes, the next step will be the small claims court.
Feel really sorry for her daughter...

Ps it's common for people like that to agree unrealistic repayment schedules which they almost immediately default on. She probably was sincere in her intention to pay you back but intentions are worth jack shit with this personality type.

The person who barks loudest will always be at the head of the queue for her in terms of paying back.

p.s. there is also a possibility that I will be returning to the job I left (a whole other story!), which she is aware of and which makes her behaviour all the more incomprehensible!

Not really. Financially I doubt if she looks more than a day ahead in terms of consequences.

Can you tell I've dealt with this sort of thing before

feels like a bad dream...

How much is outstanding and how much (if any) can you afford to write off?

I agree with Sleepy, she's not a planner. Hence always having to scramble to keep her head just (or frequently enough) above water. What a hassle for you, hope it gets settled without too much fuss.

How much was the loan for?

I would go to court right now. She's got no intention of paying it backs on you can write it off or go to court.

The problem with court is that you don't know how close to the edge she is.

You can't get what she doesn't have. She may ignore a court judgement which will involve you paying for bailiffs to try to collect, and if at any point she goes bankrupt then you're stuffed.

Depending on the amount owed, a more long term approach to collect at least something may be more productive, especially if you're returning to work as she can't hide from you there.

she owes about £5000...

and I don't really want to write any of it off...

It's absolutely gobsmacking behaviour - you were kind enough to lend the money in the first place and if she'd only spoken to you and been upfront I'm sure you'd have been kind enough to cut her (yet more) slack re repayments. Stupid, stupid woman.

But as it is - yes, go after her. My understanding is that small claims are quite straightforward.

You may be about to learn a very expensive lesson. Never lend more than you can afford to lose. Your "friend" does not sound like she has any financial sense whatsoever. As a PP said she probably had every intention of paying you back but realised it was unfeasible. There is always small claims court but I feel you may be at the back of a very long queue.

You might not get it back. But for your own sanity you should damn well try.

If you take her to court, there is a small chance she'll learn something and maybe change behaviour. Perhaps be less likely to try the same on other soft touches people later.

If she had to borrow from a work mate, she'd probably burned all her closer friends and family. Therefore, she's unlikely to be able to pay you back (unless she can rob another Peter to pay Paul).

If you can afford to write this money off, you will have to do that, even if only in your head, since it sounds unlikely she will ever have the money to satisfy all her creditors, even if you do go to court, since council tax and rent and food should always remain her priorities.

By all means take her to the small claims court, though, since it sounds as though she needs to know she can't get away with it.

I know this sounds bitchy, but it might also be an idea to tell others what happened, so no-one else is caught out by her (after all, you offered her money once: she may now be grasping for that kind of solution - robbing Peter to pay Paul, as mentioned above).

By the way, what sanctions were there in the legal agreement you two signed?

Sadly I doubt that you are the first nor will be the last to get taken in . If one of the debts she borrowed from you to pay off was the CT one then you know she didn't or she may simply be up to her eyes in it and firefighting whoever is on the doorstep at the time. As attempts to appeal to her better nature have failed your only redress is via small claims, but I too wouldn't hold out much hope of seeing the money again.

It will cost you about £30 to put in a claim at the Court (actually might be a bit more as the debt is £5k). And it should be simple.

But - if she has no money, she may be allowed to pay back at £5 per month, ie £60 / year.... so you may have the right to get the money back, but you probably won't see it for a while.

You poor thing.. You need to contact her to say you will be forced to go to small claims if she doesn't pay, you need the money etc. If she doesn't respond, then go to small claims. As a pp said, whoever is shouting loudest will get paid first so you need to make yourself hears above her other debts. By the sounds of it she is probably in a lot more financial trouble than you realised and unable to cover your monthly payments.

Have you got a phone number for her or her address? You need to talk to her directly about this. I feel for you, it does seem you have been taken advantage of.

x-posted with £5,000! Is that after shepaid you the £700?

yes I have her work, mobile and home numbers,

and yes, the £5000 is after repayment of £700 :-(

Were you charging interest ?

Wow! You were very generous but as someone else has said, I would only loan money if I could afford to lose it. DP lent his lifelong best friend £2k after his friend confessed he'd been stealing money from work and hidden it from his wife. His friend vowed to repay it immediately but avoided contact for about a year; eventually DP got it back but after a lot of nagging. Luckily their friendship has remained intact, probably because they're blokes, but I was appalled.