How can I recover the money i lent to a company 4 months ago?

[raulmihai2020]

Hello. I need some legal advice in regards to some money I lent to a company. In December , last year (5 months ago ) , i lent  £2000 to a friend's company . He said he would give me the money back in a few days. . In the mean time, the situation got rough, he kept on telling me that next week he is going to pay but nothing ever happened. When I wanted to see what are my legal options I realised he sold the company to someone else ( so he wasn't the legal owner of the company anymore). I sent the money in December, from my bank account to the company's bank account . Please tell me what should I do, legally, to get my money back. I heard something of a Small Case Court, but I have no idea if it is the best solution and what I have to do before . Thank you very much 

[unclebulgaria67]

So you got this in writing, that you loaned the £2k to Mr X or company x ?

 

If you did not get this loan agreement in writing, could your friend argue that it was a gifted amount ?

 

When did you last have contact with your friend ?

 

If it was a limited company, have you obtained the details from companies house ?

[raulmihai2020]

hello. 

I never got it in writing. It was just some phone calls and me sending the money from my bank account to the company's bank account. I don't think he could argue it was a gift ( also, my wife knew about it from the beginning ) . My last contact with him was like 2 -3 weeks ago. He never argued about the debt, but he kept on telling me he has no money. I checked the company on the Company's House and that is how i knew the owner of the company changed in January. 

 

Thank you,

[unclebulgaria67]

See if you can get your friend to confirm in writing that they owe you £2k and that they will pay you say £50 per month, until the amount is repaid in full.

 

If you issued a County Court claim and obtained a CCJ, if your friend does not have ability to pay you, then you would have incurred additional costs without recovering any of the original loan amount.

 

 

[raulmihai2020]

but I sent the money to the company , not to the friend. He was the owner of the company , at that time. Now, the company is owned by a different person. I believe the debt is from the company, not the man. Am i wrong? Thanks

[ericsbrother]

You have a big problem and that is proving the debt. for a debt to be created there must be an agreement that the money will be repaid, how and in what time frame.

As far as the law goes you either gifted the money or loaned it in a way where you cant take civil action to recover it because there are no explicit terms.

Now the BUSINESS doe owe you £2k and the debt will have passed on to the new owners but you still cant take steps to recover the money other than to ask the new business owners for it. They may deny the debt and you will be impossibly placed to prove it because there is nothing in writing. Proof of money transfer doesnt prove the debt exists nor how it should be repaid even if it did.

you will lose a court claim due to the lack of paperwork showing how and when the repayment should take place.

Sorry for your predicament but you are where you are

[BankFodder]

I think that rather than right, you should first of all telephone. However read our customer services guide. Implement the advice there. Then telephone and have a conversation which leads round to the loan and whatever agreement there might have been to repay. Get it recorded.

Then write to him and asked him to confirm the telephone conversation. If he confirms it then you are on your way. If he doesn't confirm it or denies it then it becomes even more interesting and I think that you will probably have you more leverage.

You say that you believe that you lent the money to the company and that the company has now sold. As long as the company has been sold and not dissolved then the loan to the company is still current and the company debt to you is still current.

I think the first senior to do is to get the evidence – and I think you should follow the advice that I have given. The fact that the person has stopped contacting you is extremely troubling. The fact that the company ownership was transferred is even more troubling and so I think that you are dealing with somebody who is trying to be slippery about this – and so your way forward is clearly that you also have to act it in a slippery way.

Come back here when you got the evidence and we will help you to the next step

[unclebulgaria67]

My thoughts were that your friend sold the company and therefore may have received payment for the companies assets.   Did the new company become liable for any liabilities that existed ?

 

If you had nothing in writing, your friend was the sole director of a limited company and asked for help, does the money being processed  to a business account, mean it is a loan owed by the business ?

 

Follow Bankfodders advice above and see what you can achieve.

 

 

[Ethel Street]

5 minutes ago, unclebulgaria67 said:

My thoughts were that your friend sold the company and therefore may have received payment for the companies assets.   Did the new company become liable for any liabilities that existed ?

 

 

If the loan was to the company then the company is liable to repay the loan. Changes to the shareholders have no affect of the liability of the company so it's irrelevant that the friend has sold the company. You would issue SCC proceedings against the company at its registered address.

 

raulmihai2020 are you confident the company even has £2,000 of assets if you were successful in your claim?

 

The main practical problem is what's already been said. The lack of any written evidence that you made a loan to the company. If the company acknowledged the debt you would have been listed in its accounts as a creditor when it was sold. You could seek discovery of the company financial information as evidence. I will bet though that the friend "forgot" to record the debt in the company's accounts when he sold it in order to boost the sale price.

[BankFodder]

.... in which case both you and the purchaser of the company may have a valid gripe against your friend – and that would make things even more interesting for you.

Also, if your friend has hidden the debt then it may well be that he will become personally liable as well as the company.

However you need to get the evidence first. Make a recorded phone call first of all