MONEY MORAL DILEMMA: Would you lend to a friend in need?

JayD

I wouldn't lend to a friend - or anyone else I think.
But I would give as much as I could afford to part with and help her as best I could with seeking professional advice and help.
It may be that my money could buy the help she needed to get her out of financial difficulty - in the short and the long term.
So 'no' to a loan' but would give the most I could afford as a gift with 'seeking professional help and advice strings' condition.

MakeitgoRIGHT

Would you lend to a friend in need? Jane's best friend since childhood has always been terrible with cash and now she's got into serious debt and is in danger of losing her home. She's asked Jane for a £10,000 loan; money that Jane can afford to lend without a problem, but can't afford to lose. They've always been through thick and thin together and supported each other in everything. Should Jane lend the cash?

If I had the cash available and wanted to help the friend out of a tight corner, maybe. BUT, the only way to do it (unless you feel like giving the cash away, which sounds like it with Martin's particular friend) is to get a share of their house as collateral.

If they do not pay it back, you have a charge on the property for when they sell. They don't mind as it got them out of a corner.

Probably needs a solicitor to set it up, but that should be worth it.

baf02

Hi I'm Bev and new to the site:p

I always say you can never forsee the future and because of this I would not lend a friend regardless of how long I known them MONEY because if for any reason you do fall out how do you get the money back or prove it was loaned not a gift etc. Its like getting a credit card in your name but for someone else its ok when every thing is hunky dory but when it goes wrong its your name and your credit card at the end of the day. Only other thing you could do would be to have something written up by your solicitor but if they for some reason end up where they don't have the money to give back then it doesn't matter whether you have something in written or not you can't get blood out of a stone.

aiba

I take it that the dilemma arises because it seems that Jane is facing one of two undesirable outcomes: either she saves her money but leaves her friend to face horribly dire straits, or she helps her friend but probably loses her money. A solution to the dilemma would then be a course of action that avoids both of those outcomes. I would side with spykicpup's and sjc's (above) proposed courses of action because I think they would succeed to a large extent in avoiding those outcomes. Firstly, there are probably other ways in which Jane can help her friend: Jane is good at managing money, so she could go through her friend's finances with her, and try to find ways to get her back on track. Secondly, if that is not possible, or not enough to save her friend from losing her home, then Jane could lend her the money but insist and make her friend understand, that the right mechanisms are in place to ensure repayment.

bigstoo

Noooo. Definately not.
I've been in the situation of being desparate for money myself. At the time, it felt like it would have been a godsend for someone to 'bail me out' but in retrospect I don't think I would have learnt what I know now.
I think generally you have to be cruel to be kind.

goforit_2

:rolleyes: Right, before everyone on this forum gives us their story, this is how it should be done.

First decide what you want more, the money or the friend.

I loaned £1000 to a "Friend" (they asked for £2000). Thinking as you do, you are helping, (and this is the saving grace) we drew up an agreement for them to pay back in 12 months, bearing in mind his wife was packing tights at home for £50.00 per week and he was working with overtime.

The first payment never came, nor the second nor the third. Following legal advice, I wrote a polite reminder outlining our agreement. Still no payment. Eventually this went to the small claims court and they now pay me £15.00 per month!!. It will be a further 5 years of collecting recorded mail before this is cleared.

GET AN AGREEMENT IN WRITING. End of.

katypetal

I would have to say no, although Im in this much debt also I would never dream of asking a friend to take a loan out for me.

At the end of the day I got myself into the debt and it will be me getting myself out of it, although saying that my boyf has just paid £3000 off one of my cards this will be paid back as soon as the sale of my flat goes through. I was very gratful for this so maybe she should lend her friend a small amount wait for her to pay it back and then do it again if it works out.:T

ellielou_2

Without a shadow of a doubt I would - and she'd do the same for me.
What kind of friends would we be if we didn't?

Mary_Hartnell

What makes you think your friend will ever change ?

In my time I have lived or worked with people who are addicted to nicotine, alcohol, gambling and most common of all spending. There are people, male & female, who cannot stop spending until their cheques start bouncing. Addicts would sell their mothers ( and break into the homes of the rest of us) to feed their habits.

The “friend” sounds like one of these. You are doing none of the above any favours by GIVING them more of their addiction. There are only two ways that an addict can give up. One is “cold turkey” when the object of their addiction is simply not available.(No crack = no crack-heads) The second is the will to quit. This cannot happen until their delusions go and they see themselves for what they are. They see the way that their addiction is wrecking their future, and as those little comforts (“why use your own money when you can use someone else’s ?”) fall away they must develop the WILL to quit.

Stick by your friend through these hard times, offer help with budgets and ducking and diving but, unless the financial crash is a genuine unforeseen disaster DON’T FEED THEIR ADDICTION. Remember people resent renting property, but people HATE bankers who force them to rent someone else’s money; for some reason money should be rented for nothing and never given back. So don’t lend money unless it is a commercial transaction and you want to be hated.

In my time, I have lived in shared property, and sometimes had to act as banker for the weekly paid who are skint by day 4, or the monthly paid who want “a sub from the kitty” by week 4. These type of people have to be ambushed on pay day for their dues and then refused anything more than bread and water when they run short. Try and be nice and the whole household will have trouble with the rent and utility bills.

Last time there was a housing price slump (for children under 30 that was about 1991); the (then) Bristol & West building society researched all their customers who got into trouble with their mortgages. They found it was NOT death, divorce, redundancy and illness that caused the problem. Educational attainment seemed to make no difference. Some people were unable to realistically handle money. They found the most trouble with the larger mortgages, taken out by professionals; some of these people, used to living on overdrafts, could not see trouble ahead, when it was staring them in the face.

Recommend your friend to MSE and help him/her through the painful process of self discovery. If “going down the pan” is the only answer, then get it over ASAP – life goes on. Your friend doesn’t need to keep up with the Joneses. There are 4 billion people in the world who have no social security worth the name, so even bankrupt and homeless, the friend is still better off than one of these.

Mary.

PS My dad lent 400 GBP to a friend on a “business venture” (that is 10K in today’s money). He never got it back, but worse every time he and my mum had a row over money, she would raise the small matter of 400 GBP – so he suffered twice.

giada

My partner and I lent £15,000 to a friend. He had a limited company and a private practice - as an acountant no less! - but needed this money to pay sums outstanding to Inland Revenue and VAT. Two months later he went into IVA and we discovered that he had debts to over £300,000 (all on credit cards) and both properties he owned were mortgaged to the hilt and had second charges against him.

There didn't seem any point into forcing him into bankruptcy so we agreed that he would pay us £3,000 a year over five years and that if we agreed to the IVA we would get a percentage that we could look on as interest. So far we have had more from the IVA than we have from him and we are still over £10,000 the losers.