Parent-Child Loans

The court looks at the true intention of both parties, not just what was said. Factors include whether there was a written agreement, whether interest and repayment terms were agreed, whether actual repayments were made, and whether there were secured assets. Reference case: Pelly & Nolan [2011] FMCAfam 530.

Possibly, but it's difficult to prove.

It could be or could not be. The key is whether the money was used for family purposes and whether both parties knew and agreed.

The court typically views this 'post-separation debt demand' behaviour with high suspicion, doubting whether it was a valid loan.

Parental loans without bank transfer evidence are difficult for courts to accept. Such funds are usually treated as gifts to the child.

It depends on whether there was a clear agreement. Without an agreement, courts often consider it 'family support' rather than a loan.

If recognised as a genuine debt, it becomes part of the asset pool liabilities and will be deducted from net assets before distribution.

Yes, this is the child's debt. Failure to disclose will invalidate the financial agreement.

Yes. Parents' testimony is usually viewed as 'interested party testimony' and requires stronger evidence to be credible.

Yes, but credibility is low because it appears to be evidence created for litigation.

Theoretically valid, but extremely difficult to prove in practice. The chance of court recognition is much lower than written contracts, so verbal agreements should be documented in writing as soon as possible.

Sign a formal loan agreement with both parties' signatures, keep evidence, set a repayment plan, and consider registering a caveat if the amount is large.

If parents' money cannot be counted as a loan, it is considered the child's financial contribution to the family. During divorce property division, higher financial contributions may result in receiving more assets.