Legality of lending money to a friend - am I screwed ?

[Bubbletoo]

Hi, a query for all you legal eagles and wanna-be's.

Ive just lent some money to a friend. Its not pocket money but its not big bucks either. Put it in black and white with names, amount and interest so we are both comfortable.

The issue is the SG government seems to be going bananas about illegal money lending. Im not a money lender and am just helping a friend but have gotten cold feet and am worried that if the government got its hands on the document we could be in all sorts of trouble.

Ive pasted a copy of the relevant legislation below which has an extremely broad definition. Its a bit farcial and was hoping for some comments or past experiences ?

"Certain persons and firms presumed to be moneylenders.
..... any person who lends a sum of money in consideration of a larger sum being repaid shall be presumed, until the contrary is proved, to be a moneylender."

Cheers

[sundaymorningstaple]

Pretty straight if you ask me. If you lend money and charge interest then you are considered a money lender. Therefore, unless you are a licensed moneylender you are in violation of the law based on the fact that you are charging the person interest. This means you are in it for profit (in the eyes of the law). No ambiguity that I can see.

Don't think you are screwed unless you have a falling out with your friend.

[taxico]

you can threaten various form of actions first (it worked for me), or actually contact commercial debt collectors to discuss your options. i think it's free to talk to them, so be sure to bring your papers in and see what can be done.

but if he's your friend, try to work it out yourself perhaps through some sorta installment plan... i ruined a friendship over a loan. i hope it doesn't happen to you.

if anyone's reading this and thinking of dishing out money to a buddy, just make sure you can afford to not recover the money, or else don't part with the cash.

[sundaymorningstaple]

Yeah, Friends & Family are the worst. If you lend any amount of money to them make sure it money you could lose at the race track as you have about as much chance of getting it back!

[durain]

you can threaten various form of actions first (it worked for me), or actually contact commercial debt collectors to discuss your options. i think it's free to talk to them, so be sure to bring your papers in and see what can be done.

a snake head with red paint will do nicely.

[taxico]

ha haha! i thought it's a swine-like head piece!

well, what i meant is just verbally threaten to set the lawyers and debt collectors on them.

sometimes it takes a little bitta prodding, y'know. take 'em out for a beer, talk to them, coax em... oh lord, it's like being on a date!

yeah. i had to threaten my friend after wining and dining him, before he succumbed to my verbal barrage and set up an unofficial instalment plan.

that wasn't the last of it either. i had to continually chase him or he'd just "forget" to deposit the money into the account.

he had a major gambling problem. those are the worse... ! not for nothing, but i won't be lending money in a hurry again.

[cutiebutie]

you can threaten various form of actions first (it worked for me), or actually contact commercial debt collectors to discuss your options. i think it's free to talk to them, so be sure to bring your papers in and see what can be done.

a snake head with red paint will do nicely.

A 'friend' still owes me over SGD20.000 and simply refuses to pay me back, it's been over four years and he even refused a lawyer's call and demand. All I had was an IOU and now I can't even find that with all the moving around.

DON'T lend money to friends. Sadly enough.

[Matney]

Banks and/or moneylenders are for lending money, not friends.

[Bubbletoo]

Jeez Im just wondering if what Im done is legal or not and how the law considers the situation.

Sundaymorningstaple's reply is consistant with my own research. Damn !!

[maneo]

Ive just lent some money to a friend. Its not pocket money but its not big bucks either. Put it in black and white with names, amount and interest so we are both comfortable.

If he's a friend, why are you charging interest?
Not that good a friend?

Guess you should have left the interest part off the paper.

[ksl]

Jeez Im just wondering if what Im done is legal or not and how the law considers the situation.

Sundaymorningstaple's reply is consistant with my own research. Damn !!

How difficult is it to prove you are a money lender....I sincerely believe the legal system are not stupid, so the actual interest you are charging is very relevant, there is a considerable difference in interest rates, between friends, and money lenders...if your talking about bank interest, I would automatically believe, that any judge, or jury, could evaluate, the difference between two loan sharking and bank interest rates.

I believe you are sweating over nothing, if you have charged him a bank, interest rate, because theoretically you are not making any more money out of the transaction, that isn't reasonable.

Go and get some free legal advice at the community centre, they have client confidentiality, I don't believe you have any problem, unless you are trying to make more than any bank interest rate. I would call it a thin line, but obvious, if you are telling the truth.

[Levikane]

A 'friend' still owes me over SGD20.000 and simply refuses to pay me back, it's been over four years and he even refused a lawyer's call and demand. All I had was an IOU and now I can't even find that with all the moving around.

DON'T lend money to friends. Sadly enough.

You called a lawyer over $20 bucks?

[maneo]

^ New to the rest of the world, are we?


Ever hear of Europe?
They have some different conventions there.

I suppose next you'll start complaining about the spelling of realise and honour and aluminium . . . .

[sundaymorningstaple]

A 'friend' still owes me over SGD20.000 and simply refuses to pay me back, it's been over four years and he even refused a lawyer's call and demand. All I had was an IOU and now I can't even find that with all the moving around.

DON'T lend money to friends. Sadly enough.

You called a lawyer over $20 bucks?

I believe that is a typical European way of writing $20K not $20. (using a fullstop instead of using a comma as is in the British/US style. I'd have called a lawyer as well.

[sundaymorningstaple]

^ New to the rest of the world, are we?


Ever hear of Europe?
They have some different conventions there.

I suppose next you'll start complaining about the spelling of realise and honour and aluminium . . . .

I blame that on the British. It's a bit of a problem unless you change your keyboard Language as the darn spell-checker gets aggravated here, especially in Singapore where they don't really know which way they really want to go. and having to use the bloody character map facility all the time is a pain in the butt even when it's placed on the desktop. Why doesn't everybody complain about Malay? They did the same thing the Noah Webster did. They took Bahasa Indonesia and simplified the language spellings and it became Basaha Malayu. No problem.