CASE STUDY ANALYSIS

Case Study Analysis

Case Study Analysis

The paper proposed a case study analysis that considers the given condition under five different situations. The case indicates the case of Peter who borrowed a sum of £25,000 from Sue on April 2, 2012 that he is required to repay by no later than July 1, 2012. Applied interest rate on the principal amount of borrowing is 12%.The case study focuses on the situation of borrowing and its claims and conditions of settlement. The case study covers the area of debt settlement, claims for outstanding balance, claim for outstanding interest and the related legal issues that are involve in debt arbitration and debt negotiation.

Situation 1

On 2nd June, Sue accepted the sum of £20,000 from Peter in settlement of the debt. However, on 1st July, she has now decided to claim from Peter the outstanding balance of the debt plus interest.

Answer

In this situation, Peter bought a sum of £25,000 from Sue on the interest rate of 12% and agreed to repay till July1st. With reference to this situation, Peter repays the sum of £20,000 on June 2nd to Sue approximately a month before the due date. Sue accepted the payment in settlement to the given amount of £25,000 from Peter. Sue decided to claim for the outstanding balance and interest from Peter on July 1st.

The legal position of Sue in this situation is of a loan manager who provide loan to Peter on interest and received the amount for loan settlement (Allen, 2009, pp. 27-31). On individual basis loan is generally provided under agreed term and conditions. As per legislation Sue can claim the outstanding balance of £5,000(Millett, 2011, pp. 65-69). She can also claim for the interest on the settled and repaid amount. Sue agreed on the interest rate of 12% that makes an amount of £250 per month to be paid as an interest from April to July (Steiner-Khamsi, 2009, pp. 665-678).

As Peter held the amount of £25,000 from April 2nd to June 2nd, Sue is legally eligible to claim the interest for the period of two months of April and May that makes a sum of £500. But after the settlement of £20,000 by Peter on June 2nd Sue can only claim interest on the outstanding balance of £5,000 (Clarke, 2010, pp. 405-412). On £5,000 Peter is alleged to pay an amount of £50 per month for a period of one month From June 2nd to July 1st (Fradin & Judith, 2011, pp.252-256). Hence Sue is legally alleged to claim an outstanding principal amount of £5,000 along with the sum of interest totaling £550. On the whole she can claim Peter for a sum of £5500 (Allen, 2009, pp. 27-31).

Situation 2

On 1st July Peter repays to Sue the sum of £25,000, but without payment of the agreed interest on the loan. She now wishes to claim for the outstanding interest.

Answer

In this situation, Peter bought a sum of £25,000 from Sue on the interest rate of 12% and agreed to repay till ...