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Old 14.12.2013, 12:13
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Written statement of borrowing/lending money?

My best friend (swiss) is in a financial crisis, and i am willing to help him by lending him some money (roughly one month of my salary)

As normal we want to take some measure as protection so that in case of problems later I am able to claim my right of the money. What I think is that we write a paper (in french) something like:

On date xxx, person aaa borrows xxx chf from person bbb.
Followed by two signatures.

Question: legally speaking, is this enough?
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Old 14.12.2013, 12:15
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Re: Written statement of borrowing/lending money?

Maybe you want to put the full details of each person, including date of birth, current address, Heimatort and the other stuff that normally appears on Swiss docs.

Also, a repayment plan including date for final repayment and any other associated details.

Plus, perhaps a witness to each signature could finally cement the agreement?
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Old 14.12.2013, 13:13
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Re: Written statement of borrowing/lending money?

I've lent a times to one of my family, back when I was less trusting and he was less careful.

We documented everything, especially what would be repaid and when. I insisted on standing order.

Having it documented didn't make me feel any more likely to get it back. I always assumed I'd never see a penny and wrote it off.

I didn't see a written agreement as enforceable. Although, they did make sure our memories did not fade.

It went against the grain to document lending to family, but it was really the most pragmatic way.
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Old 14.12.2013, 13:23
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Re: Written statement of borrowing/lending money?

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My best friend (swiss) is in a financial crisis, and i am willing to help him by lending him some money (roughly one month of my salary)

As normal we want to take some measure as protection so that in case of problems later I am able to claim my right of the money. What I think is that we write a paper (in french) something like:

On date xxx, person aaa borrows xxx chf from person bbb.
Followed by two signatures.

Question: legally speaking, is this enough?
Expect to loose your best friend, been there done that. Only do it if you happy to give the money as a gift when it all goes south.
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Old 14.12.2013, 13:38
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Re: Written statement of borrowing/lending money?

Been there, done that - badly stung. Hurts. Lent to one family member, embezzled by non family member- gone belly up to not repay. Fortunately can dust ourselves and walk away- limping.

Last edited by Odile; 14.12.2013 at 14:37.
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Old 14.12.2013, 13:44
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Re: Written statement of borrowing/lending money?

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My best friend (swiss) is in a financial crisis, and i am willing to help him by lending him some money (roughly one month of my salary)

As normal we want to take some measure as protection so that in case of problems later I am able to claim my right of the money. What I think is that we write a paper (in french) something like:

On date xxx, person aaa borrows xxx chf from person bbb.
Followed by two signatures.

Question: legally speaking, is this enough?
Your profile is a bit bare so it's not clear if something in German can help but anyway, here is an article from the Beobachter with specimen contract link . And here is one from Ktipp link . You may find an equivalend in a Swiss french consumer publication. In principle, anything in writing is good but of course it won't help if the borrower can't repay.
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Old 14.12.2013, 17:18
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Re: Written statement of borrowing/lending money?

A simple statement of facts will be fine: names, amount, any interest rate, repayment schedule etc.

Make two copies both parties sign each and keep one.

Remember:
you are doing something that a bank would charge well over the base rate for and only allow with security to cover the loan if it went pear-shaped.
So never loan what you cannot afford to lose...
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Old 14.12.2013, 18:15
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Re: Written statement of borrowing/lending money?

Been, there done that. Had a signed contract, went to court, won the case, never received a dime back.

Lending to friends or family can destroy those relationships if you're not careful. Always be prepared to lose the money, forgive and forget.
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Old 14.12.2013, 18:35
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Re: Written statement of borrowing/lending money?

Thanks everyone. I also read a little other informations. I rwad somewhere that to avoid potential tax issues (taxable gift?) I should charge the standard interest rate in the written statement. But I don't really understand this point. What is the tax consequence of doing or not doing this?
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Old 14.12.2013, 19:46
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Re: Written statement of borrowing/lending money?

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Thanks everyone. I also read a little other informations. I rwad somewhere that to avoid potential tax issues (taxable gift?) I should charge the standard interest rate in the written statement. But I don't really understand this point. What is the tax consequence of doing or not doing this?
It's not a taxable gift if it's a loan, interest can be at any rate you want possibly zero. Any interest is liable to tax....
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Old 14.12.2013, 20:18
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Re: Written statement of borrowing/lending money?

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Thanks everyone. I also read a little other informations. I rwad somewhere that to avoid potential tax issues (taxable gift?) I should charge the standard interest rate in the written statement. But I don't really understand this point. What is the tax consequence of doing or not doing this?
I'm not aware that gifts are taxed in Switzerland. They are taxed in Germany. Charging the standard rate of interest (AFR) is a common precaution in the USA where (for large loans) the interest could otherwise be deemed a gift and also be charged (somewhat inconsistently) as income to the lender. http://apps.irs.gov/app/picklist/list/federalRates.html

A note of any kind serves as a useful reminder. But as others have said, never lend unless you are willing to forgive the loan if circumstances require.

I was, for several years, a bankruptcy lawyer. I know of cases where loans were made by generously helpful people of their life's savings, their retirement nest egg, and all was lost in a bankruptcy by the borrower. (OK, in Switzerland there isn't that sort of personal bankruptcy, but even an order from the Betreibungsamt/Office des poursuites won't garner the money if there is none.
http://en.wikipedia.org/wiki/Insolve...of_Switzerland )
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Old 14.12.2013, 22:12
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Re: Written statement of borrowing/lending money?

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I'm not aware that gifts are taxed in Switzerland. . . .
Gift Tax (Schenkungssteuer - Schweiz). You are now

Last edited by me.anon; 14.12.2013 at 22:13. Reason: spelling correction
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Old 14.12.2013, 22:26
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Re: Written statement of borrowing/lending money?

Thanks for that. Fortunately in all cases of concern to me the tax would be minimal (gifts to offspring) https://www.credit-suisse.com/ch/pri...tabelle_en.pdf

As with Germany there could be tragic issues where there are conflicts of characterization http://supreme.justia.com/cases/federal/us/494/596/ (income tax vs gift tax) or the tax is imposed upon donor (as in the USA) vs. donee (Switzerland, although both parties are jointly and severally liable)
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Old 14.12.2013, 22:39
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Re: Written statement of borrowing/lending money?

A family "friend" leant me money to start my business. It not only haunted me, but put me in a very awkward situation with him. Something which I did not want. Jerk.

End result, he received his money, but the friendship is gone, which is a pity, as I cared a great deal for his wife and children.

Better to borrow from a bank, in my opinion.
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Old 15.12.2013, 00:05
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Re: Written statement of borrowing/lending money?

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Better to borrow from a bank, in my opinion.
And if the bank wont agree, it probably has a pretty good reason.
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Old 15.12.2013, 17:50
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Re: Written statement of borrowing/lending money?

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Been, there done that.
Lending to friends or family can destroy those relationships if you're not careful. Always be prepared to lose the money, forgive and forget.
Very sane advice. Life's lesson which somehow I have yet to learn...
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Old 15.12.2013, 18:20
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Re: Written statement of borrowing/lending money?

I have one rule: I can lend money to a family member of friend if I am ready to not see the money again OR to have to be able to live without that person in my life if it were to come to disaster. The exception is a cousin of mine who I have lent money and has lent me money and we do this once in a while (ie. when buying a car etc)...
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Old 15.12.2013, 18:24
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Re: Written statement of borrowing/lending money?

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A family "friend" leant me money to start my business. It not only haunted me, but put me in a very awkward situation with him. Something which I did not want. Jerk.

End result, he received his money, but the friendship is gone, which is a pity, as I cared a great deal for his wife and children.

Better to borrow from a bank, in my opinion.
Seems strange it spoilt your friendship as you repaid your friend?
Most friends and family lend money at 'mate's' rates- unlike the banks which can be extortionate. And very often people borrow money because their credit rating is shot by previous debts (hmmm which should ring alarm bells anyway).
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Old 15.12.2013, 18:27
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Re: Written statement of borrowing/lending money?

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Seems strange it spoilt your friendship as you repaid your friend?
Most friends and family lend money at 'mate's' rates- unlike the banks which can be extortionate. And very often people borrow money because their credit rating is shot by previous debts (hmmm which should ring alarm bells anyway).
well what if the other person thought they were owed more than money? It can happen unfortunately

EDIT: What I meant was that maybe that person felt like he had saved them and they owed them the world...
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Old 03.01.2016, 17:18
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Re: Written statement of borrowing/lending money?

I agree with the shared sentiments on this thread. Interestingly enough, the supposed "friend" or family don't always adhere to a pre-agreed due date. On the other hand, loaning money to a relative stranger has yet to disappoint me.
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