Legally lending
Question
My best mate at uni is totally broke so I've offered to lend her some money on a monthly basis, which she'll repay later. Is there some way I can cover myself legally so that if our friendship breaks down in the future she still has to repay the money? Is a legal form we can fill in?
Answer
Basically, yes, you can draw up an agreement and, with a witness, get your friend to sign it. But there isn't a form you can just fill in.
If you do want to draw up an agreement you need to remember to include a start date, the amount to be paid each month, the rate of interest and the total cost of the loan.
Before you choose to draw up a contract you might want to think seriously about your relationship and the effect lending this money may have on it.
Consider what will happen if your friend doesn't pay you back. Are you going to be willing to take her to court to get the money back? What if it is an empty judgement, in that she can't or won't pay? Will you be willing to send the bailiffs in? These are all issues you may have to face in the future if you and your friend have a contract.
Updated: 01/02/2005
Question answered by CAB
