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How a man’s $250k debt ballooned to $21m due to high interest and penalties
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The High Court ordered a retrial because it "shocked the conscience" that a $250K debt can turn into millions.
PHOTO: SPH MEDIA
- A man's $250,000 loan from a moneylending company ballooned to $21 million because of exorbitant interest and late payment fees.
- To repay part of the debt, the debtor sold his home to the company's director and rented it back, leading to a court case over unpaid rent.
- The High Court ordered a retrial due to potential "illegality" in the loan and rental transactions, questioning the fairness of the debt.
AI generated
A man who borrowed $250,000 from a licensed moneylender not only ended up losing his home, but his debt also ballooned to over $21 million when he could not keep up with the exorbitant interest and penalties levied on him.
The unusual case came to light only because in a bid to allow his family of five to have a roof over their heads, he sold his $2 million home to the director of the moneylending company to pay off part of the debt. He then signed a tenancy agreement so that his family could continue living there for a monthly rental of $7,000 to $8,500.
