Lent money to a friend or family member and not been paid back?

Lending money to someone close to you is usually an act of trust. When it is not paid back, the damage goes further than the amount. People tell us they feel betrayed. Arguments start at home, often between the two people who made the decision to lend, one of whom never wanted to.

And it is usually the person asking for the money back who ends up being treated as the problem.

Was it a loan or a gift?

This is the question everything turns on. Arrangements between family and friends are not always treated as legally binding in the way a business contract is, so the clearer the evidence that the money was lent and expected back, the stronger your position.

Useful evidence includes:

• The transfer itself. A bank transfer, especially one with a reference such as "loan".
• Messages about repayment. Texts, emails or social media messages where paying it back was discussed, promised or delayed.
• Any repayments. Even small part payments show that both of you understood it was a loan.
• A note or IOU. Anything written down at the time, however informal.
• Other people. Anyone who was there when the loan was agreed.

None of these has to be perfect on its own. Taken together they usually tell a clear story. We cover the same principle for businesses in recovering a debt with no written contract.

The time limit may not have started yet

Most debts in England and Wales have to be pursued within six years. Personal loans between people who know each other often have a feature that changes this.

So a loan made years ago, on an understanding that it would be paid back "when you can", may still be well within time. A dated written request for repayment starts the clock, so it is worth getting the wording right. If the loan did have a fixed repayment date, the six years generally run from that date instead. Scotland has its own rules.

Asking for it back

If you have not yet asked formally, a short written request is the place to start. Keep it factual: the amount, when it was lent, that you are asking for it to be repaid, and a reasonable date. Leave the family history out of it. Keep a copy, and keep the reply.

Why a third party helps

When we are instructed, you stop being the one doing the chasing. The request comes from us, it is handled professionally, and it is no longer an argument between relatives. That alone changes how a lot of people respond.

We act for private individuals who are owed money, including unpaid personal loans to friends and family. We do not collect consumer credit debts. If a debt is not worth pursuing, we will tell you honestly at the assessment, before you spend anything.