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

kate682

How does Jane know her friend has always been bad with cash? Was it not going dutch / doing her fair share with drinks, meals, going etc? Was it a problem with not knowing how to handle finance? A problem with working? A disability? But she was given a mortgage presumably, so one would assume she wasn't that bad. Surely earlier on you should have gently said about the money thing, ie if I don't have enough money with me for rounds of drinks, I say to all that do they mind if i buy my own instead. Its never been a problem.

Surely your friend has lacked financial education during her life, not something to criticize, but something to remedy. Introduce her to this site. Help her with suggestions of debt management, getting interest payments frozen etc… AND be honest with her. Say that you can't afford to lose this money. Don't justify why...it’s your money, earnt after tax and then will go on things that are taxed mostly. Talking about TAX, what’s the freshold of giving a financial gift free from tax? You might be doing her a huge disfavour by lending her the money that is then taxable.

I would say to her, that yes I'm prepared to help her out, with a legal drawn document where I am purchasing a £10k share in her house, to be returned, plus the appropriate residual increase at point of sale or within 5 years plus inflationary interest, whichever is sooner. 5 years gives her ample time to sort things out, maybe with your help.

That’s fair. It helps her. And it gives you a safeguard. Good luck, if she’s got any sense, you shouldn’t lose a friend this way. There is no such thing as a free lunch…unless of course, you’re in business travel…wink

Rgds
Katie

RedBern

and don't lend money to family either. Lent £15k to my sister in law several years ago - she was desperate at the time, Inland Rev after her etc., and 'on the verge of losing her house'. She was going to pay it back by selling her horse and her car and lots of other stuff. Horse sold - no money - car sold - and replaced ..... eventually she paid it in bits and pieces, £1k here, etc. It caused no end of conflict at home here - as my kids were going without whilst hers blatantly weren't!! Eventually my husband (her brother) wrote to her asking for the money back and miraculously she repaid it almost in full within 6 months. However, it has created a rift between us that has never quite been resolved.
NO don't lend to friends or family. SEnd them on here for advice.

trippy

Well I lent £10k to my brother and sister-in-law to buy a house which was converted into a % of the house which I got back when they moved. We had everything in writing but there was no problem.

We also lent £3k to a good friend of mine who had helped me out in a similar situation in the past. I was pleased to be able to repay the favour. He's now paying us back at £150 a month and has £1500 to go. So far so good.

I would like to think that if we were in dire straits, someone would like to help us out too. You reap what you sow.

irishwench69

Well first, hello to all the newbies on this thread! :wave:

I would have to join the majority and say no. You're not being responsible by giving them the money, even if you give it with the best of intentions.......

Help them budget, send them to this site, do any number of things......just don't lend that amount of money to someone, friend or not.

If it gets *you* into trouble, you're not exactly being savvy are you?!

IW x

liuhut

I have lent to a friend in the past...not £10k but cetainly money that I could not afford to lose. I got it back but I think that £10k is such a lot of money. If she bails her out she will not have learnt how to budget etc to try to help herself. I think about £2k would be OK on the agreement that she set up a budget and a Standing Order to pay it back. At least it would be a start to what she has to pay.

Bargainetta

No I wouldn't lend the £10k. The clue is in the "can't afford to lose". Only lend money that you CAN afford to lose otherwise you are going to lose friends because you could resent it if the money was not returned. I have actually offered to lend a good friend £7k in a time of crisis - she turned it down and got a loan - but I could have afforded to lose it i.e. it wouldn't have meant losing my home or anything else but the money. Just for the record that friend is in a much better financial situation that myself now and I wish her the very best.

bargainbetty

I have lent money to two of my best friends. One was honest and said to me that she didn't know when she could pay me back. She has kept a to-the-penny account of what I have given her, and we have agreed a payment plan for her, which she has kept to.

The other has called on four or five occasions, claiming crises and saying that she only needs a loan for a week or two, and can pay me back as soonas she gets paid. I have gone to the bank and paid money directly into her account for her to help her out, on the understanding that I would get it returned the same way because I couldn't afford to lose it. So far, she has paid back only £20 out of over £600. I will never lend her money again. She knew I needed it back and she never mentions money until the next time she needs a loan.

I'm with the NOs.

trippy

bargainbetty wrote:

I have lent money to two of my best friends. One was honest and said to me that she didn't know when she could pay me back. She has kept a to-the-penny account of what I have given her, and we have agreed a payment plan for her, which she has kept to.

The other has called on four or five occasions, claiming crises and saying that she only needs a loan for a week or two, and can pay me back as soonas she gets paid. I have gone to the bank and paid money directly into her account for her to help her out, on the understanding that I would get it returned the same way because I couldn't afford to lose it. So far, she has paid back only £20 out of over £600. I will never lend her money again. She knew I needed it back and she never mentions money until the next time she needs a loan.

I'm with the NOs.

I do understand what everyone in the NO camp is saying but there are people out there who DO repay the money. In the above case, one person is repaying the money. Why should she suffer because of the other person not repaying? Why remember the one who DIDN'T repay? Why not concentrate on the one good deed that worked out and made a difference to someone? There are good AND bad stories.

roxygirl_2

I have lent money to friends in the past and unfortunately it has changed relationships for the worse. One friend did finally pay me back a significant sum (to me at least) in full but there was a time I doubted she would and then I was afraid she would ask me again so I avoided her. I am in the "NO" camp on this one.

rubix_76

Initial thought would be No !

I too have lent money to so-called "friends" (and only in the order of £200) when I was student.

We were all moving in together in a flat, and this was for the deposit. It took me over a year of constant nagging, and she too could afford it, but just kept fobbing me off.

I suggested weekly or monthly installments, nothing. Eventually I got my money back but it put a strain on our friendship as she was going out with a friend of mine who also was sharing the flat. He paid up his share pronto, but initialy didn't help her pay, but was the one who paid it evetually.

I would give all the help possible rearding budgeting, snowballing CC's, 0% balance transfers etc etc. then wait til see how it went.

If they were a really good friend and I know I could trust them (and them, me) I would offer the money but only on the premise that I could take COMPLETE control of thier finances, right down to me giving them "pocket money" and then all the bills would be paid and the debt could be kept under control and be repaid where possible.

They would really have to be good friends for me to consider this, but then I would like to think as a friend that I could have helped with the trouble in the first place, stopping them getting in this state altogether.

Only 17 sleeps to Santa !!! :xmassign: :xmastree: