Is there a formula to index link money owed?

  Cara2 16:38 07 Oct 2010
Locked

Can anyone advise please how to index link money which is owed?

Money owed continues to accumulate (unpaid rent and other associated amounts), some of it backdating 5 years to the present.

I know it will be paid eventually (even when the property is sold), meanwhile should the amount be index linked?

Hope this makes sense.

Cara

  wiz-king 16:44 07 Oct 2010

That would depend on the wording of the original agreements. Some but not all allow for interest to be charged on outstanding balances. Otherwise no, you would have to claim them.

  Cara2 17:03 07 Oct 2010

Thanks for reply.

There isn't a formal agreement as such, just a family member who has remainded in an inherited property and unfortunately been unable to pay rent for much longer than anticipated.

I am therefore wondering if we are getting to the stage that by the time he is able to pay - the amount owed will be worth relatively less in the future?

  woody 17:17 07 Oct 2010

If they have not paid some bills for 5 yrs you need to think of either taking professional advice - putting aside your personal feelings - or think about the idea you are never going to be paid.
Even in this financial climate houses are selling.
If its a case that its not sold and they live rent free or sold and they have to pay their debts - will it ever be sold!

  Cara2 17:51 07 Oct 2010

Not a problem in as much as he has a share in the house and it will be paid back eventually that way.

  Snec 21:04 07 Oct 2010

"Not a problem in as much as he has a share in the house and it will be paid back eventually that way."

If I were you I'd get that drawn up by your solicitor. Relatives and money usually create a recipe for disaster, especially when one of them is known to be a non-payer.

  Cara2 21:37 07 Oct 2010

His siblings will lynch him if he doesn't! We are working to resolve the situation. Thanks for the replies.

  spuds 22:40 07 Oct 2010

This appears to be a possible verbal agreement, which become very sticky, especially if its a 'within' family matter. Siblings and lynching as nothing to do with the matter. If I was you I would seek legal advice, which might be available from a local Legal Advice Centre or the CAB, alternatively a solicitor who offers the first consultation for free.

Presenting bills (with interest) on verbal promises would have very little standing, unless a written agreement was made. Selling property and trying to obtain money owed or promised could also lead to legal implications, especially if the person doesn't want to sell and possibly become homeless into the bargain. A further point to consider is the length of time the person as lived in the property rent free, which so far appears to be 5 years. Give it another 7 years (I think, but not sure) and they might be able to claim squatters rights.

Apologies if my comments are off track.

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