Loans from family members

I have had a lot of financial help from family members since I moved out of the marital home with the kids. This amounts to some £20k and has been used to help me pay for a deposit to buy my current home, contributions to costs of building work needed to make it habitable and contributions to considerable legal fees for a very protracted contact and residence case. Loans were made on the basis of repayment when the divorce was settled from the sale of the marital home (worth about £300K with mortgage already payed off).
Am about to start on Ancillary Relief, but how can I/ can I ensure that these debts are taken into account? Do I need them documented in any specific way?

Hi humdrum,

This is quite a difficult one because loans from family and friends are often classed as "soft" loans and not taken into account. Having said that my ex borrowed a similar amount from his sister when we separated and it was taken into account.

Put it on your form E under liabilities and provide documentation for who loaned it and what it was used for, eg receipts for building works etc.

Best wishes,
NWTT

I am in a similar situation, Humdrum.

Just doing as NoWhereToTurn has suggested and keeping my fingers crossed that these will indeed be taken into account, despite being classed as soft loans.

Good Luck

I don''t think there''s a general rule that loans from family members or friends are disregarded, but there is no doubt in my mind that such loans would be closely scrutinised.
But if the '' loan '' was made at a time before the marriage went south, if the loan was properly documented and repayments were being regularly made, then I think a Court would be much more likely to regard such loans as genuine. There must be cases where the arrangement was intended to be an arms length loan.
LMM

Would it help to get an affadavit or some kind of sworn statement from the lender?

Hi humdrum,

LMM is away at the moment & said he might not be able to post so thought I would reply. My ex did not need a letter from his sister because I knew she would give one but did not request it.

As much documentation as you can get would be a good idea and attach copies to your form E to pre empt any questions.

Best wishes,
NWTT.

All loans are relevant and should be seen in context of the overall circumstances. However, unless there is a loan agreement prepared by solicitors and signed by both parties at the time loans from family and friends are often treated as a gift. The problem is when litigating about the point incurs extra costs making it financially not worthwhile.