When a relative stops paying, follow the sequence: a gentle nudge, a proper conversation about a revised schedule, a formal letter before action, and only then Money Claim Online — in that order, watching the six-year limitation period. Each step protects both the money and the relationship better than silence.
Rung one: assume logistics, not betrayal
A large share of “missed” family payments are a cancelled standing order after a bank switch, a new account, or a genuinely forgotten date. The first move is a message that offers an exit ramp with dignity: “Think the June payment might have bounced — new account?” If your agreement includes a grace period, this is precisely the window it was designed for.
Rung two: renegotiate on paper, not on vibes
If the truth is a squeezed budget, a smaller payment that reliably arrives beats a larger one that reliably doesn’t. Agree the revised figure and dates in writing — even a clear email exchange — so the loan’s paper trail stays continuous. A useful side-effect under the Limitation Act (sections 29–30): a written acknowledgement of the debt signed by the borrower — or a part payment — restarts the six-year clock, as long as it happens before the six years have run out, keeping your claim window open while you’re being generous.
Rung three: the formal letter
When soft contact has failed, the court’s pre-action rules expect a letter before claim: the outstanding amount, how it’s calculated, a reasonable deadline (14 days in a straightforward case), and a plain statement that a court claim follows otherwise. It costs a stamp and frequently works, because it converts a drifting awkwardness into a decision the borrower has to actually make.
Rung four: Money Claim Online
The claim itself is filed from a laptop. Claims of up to £10,000 go on the small-claims track, which is deliberately built for people without solicitors and where legal costs largely stay off the table. The issue fee scales with the claim, from £35 up to £455 at £10,000, and most claims for a fixed sum under £10,000 now go to a free mediation appointment before any hearing — a required step since May 2024, and a real chance to settle. Your evidence bundle is short: the signed agreement, the bank record of the advance, the payment history, your letter. (LendRight agreements can also be independently checked at verify.trylendright.com — useful if the other side disputes the document itself.) Judgments can be enforced — attachment of earnings, charging orders — but in family cases the judgment itself usually does the persuading.
“It was a gift”: who has to prove what
The defence you’re most likely to meet isn’t “I never got the money” — bank records killed that one — it’s “that was a gift.” English law has an answer with a name: Seldon v Davidson [1968] 1 WLR 1083, where the Court of Appeal held that once payment is proved, a recipient claiming it was a gift must prove the gift. The starting inference runs in the lender’s favour — unless you are the borrower’s parent. Money from a parent to a child is presumed to be a gift (the presumption of advancement), so a parent has to show it was a loan: a bank reference that says “loan”, messages about repayment, instalments actually paid. With a signed agreement the point never even opens; without one, you face an argument a single page would have prevented. Worth knowing either way: going to court without a written agreement is difficult, not hopeless.
One tax footnote for rung two and beyond: if you eventually decide to write the debt off, formalise it — a waiver of a loan is a gift for inheritance-tax purposes (a potentially exempt transfer), and to be legally effective a waiver given for nothing in return must be made by deed. The tax guide covers it.
The deadline over the whole ladder
Six years from a missed due date (or from the last payment or written acknowledgement) is the general limit for suing on a simple contract — or, for a loan with no fixed repayment date, six years from your written demand. It sounds like forever; families routinely drift past it precisely because chasing feels unkind. The ladder above exists so that kindness and the deadline can coexist.
Common questions
How do I get money back from a family member who won’t repay?
Work up the ladder: a friendly message first, then a revised schedule agreed in writing, then a formal letter before claim giving at least 14 days to respond. If none of that works, you can make a money claim online in the County Court. Claims of up to £10,000 go on the small claims track, where most people don’t use a solicitor.
How long do I have to sue for an unpaid family loan?
Usually six years from each missed payment, under the Limitation Act 1980. If the loan had no fixed repayment date, the six years start from your written demand. A part payment, or a written acknowledgement signed by the borrower, restarts the clock — but only if it happens before the six years run out.
What if my relative says the money was a gift?
Between most people, once you prove you handed the money over, the recipient has to prove it was a gift. Between a parent and child it runs the other way: the law presumes a gift, so the parent must show it was a loan. A signed agreement, a bank reference saying “loan” and any repayments are the evidence that settles it.
How much does it cost to take a relative to the small claims court?
The fee to start a claim scales with the amount, from £35 for claims up to £300 to £455 for claims up to £10,000. If the case reaches a hearing, a hearing fee of £27 to £346 follows. Most fixed-sum claims under £10,000 go to free mediation first, which gives you both a chance to settle without a hearing.