Family Loans

It's very common for people to loan out money to family or friends. Although they never really take consideration of the security of these loans. 

If you don't take security and your borrower goes bankrupt, you may find that your borrower has many other creditors with whom you have to share their assets, resulting in the loss of family money. 

This tragic situation can be avoided or minimised by putting in place relatively simple legal documentation up front and registering it in the appropriate place.  It is in the interests of all parties to inter-family loans to make sure this happens.

If you have any queries about this or any other aspect of property law or conveyancing then please contact us on 07 5443 9988 or [email protected].

Argon Law is a Sunshine Coast law firm based in Maroochydore.  We are commercial lawyers and property lawyers and are eager to assist you in any way we can.

More Information

It’s very common for people to lend their hard earned money to family members or close friends.

Such loans are often made without written agreements or are recorded on very lose or imprecise terms and without any consideration for the taking security from the borrower.

Security can be provided in the form of a mortgage over real estate or a charge over some other form of property like shares or motor vehicles.  The documents granting such mortgages or charges give the lender the right to sell the asset and use the proceeds to repay the debt, in priority to any other creditor.

The security is generally taken over the asset or business purchased with the loan funds.

If you don’t take security and your borrower goes bankrupt, you may find that your borrower has many other creditors with whom you have to share the borrower’s limited assets on a pro-rata basis, resulting in the loss of family money.

This tragic situation can be avoided or minimised by putting in place relatively simple legal documentation up front and registering it in the appropriate place.  It is in the interests of all parties to inter-family loans to make sure this happens.

This information is of a general nature only and is not to be relied on as legal advice. You need to seek your own legal advice.

If you have any queries about this or any other aspect of property law or conveyancing then please contact us on 07 5443 9988 or[email protected].

Argon Law is a Sunshine Coast law firm based in Maroochydore.  We are commercial lawyers and property lawyers and are eager to assist you in any way we can.

VIEW ALL VIDEOS

View Youtube channel youtube.com/ArgonLawMaroochydore

Call: 07 5443 9988 or
Leave a comment or make an enquiry about Family Loans

To prevent automated spam submissions leave this field empty.

All rights reserved | Argon Law © Copyright 2017 Website by VA