I am seeking some advice on what is defined as defamation and where I stand legally. A family friend cam to me when my family and I were in desperate need of some money. I was told not to go to the bank as this family member had a substantial amount of money in the bank to help. Cut a long story short, and we have paid back help the money owed, but can now only afford to pay monthly instalments for the remaining amount. This is all we can afford due to the loan repayments, the family member has refused to accept this payment and has began to talk to people around town for example our friends with regard to the amount owed, and now to top it all off has sent a solicitors letter stating that we have made no attempt to pay back the money. The solicitors are preparing to take us to court. We have never ever been in trouble with the law or in need of a solicitor and we are extremely worried. This so called family member has also issued us with death threats and has been harassing us. We have paid half the money owned back, we are paying still a monthly instalment and still this isn't acceptable. What do we do?