A friend in debt - how to handle?

Mojisola

princessdon wrote: »

He's a good lad just generous to the point it's a fault.

It sounds as if you need to have some discussions about being over-generous as well as the money ones.

People like him are often taken advantage of by other people - they have to learn to protect themselves. In a relationship where there is mutual exchange of benefits - you give him a free lift, he does some plastering for you - it's fair enough but not otherwise.

It can be a case of undervaluing his own worth or "buying" people's approval. If he's going to keep his finances under control, the life lessons will have to learnt as well.

gibson123

Sounds like he is the type of lad that would find a way of paying you back, if not financially then in doing little jobs and being helpful to you and yours. If it was my nephew I would just gift the money but be very clear that you trust him to not get in a mess again.

Caroline_a

I would post this on to the Loans board. There are stories on there of payday loan companies taking money out of people's accounts who have paid off a family member or friend's loan, and when that family member or friend takes out another one and defaulted for a day or so.

Personally, having been stung quite badly by some 'really nice people' who seem to be really genuine and honest, I wouldn't loan anything to anyone any more.

Primrose

Help him if you feel you must or your conscience dictates, but don't let him have it as a gift. Your gift to him would be in saving him the huge amount of interest a pay day loan arrangement would involve. Sit down with him and work out what he can afford to repay you on a monthly basis and tell him that you expect him to keep up the monthly payments without missing any for other indulgences which he might feel he is entitled to. A helping hand on this basis should be treated as a debt of honour, and if he knows what's expected of him he may be more likely to start accepting responsibility for managing his finances in an adult way.

Boots888

princessdon wrote: »

My nephew who has lived with my parents for most of his life has a friend I have known since knee high and hasn't had the best start in life.

He told me recently he is in debt with pay day loans and others. It's new and so is manageable ish at this stage. He never asked for money from me just advice on how to create a budget as he knows I have set my nephew a budget and helped him save etc.

After discussing with my hubby we agreed to loan (but long term gift) him the pay day loans. Ie I pay them in full, expect payment via monthly payments and once he has proven he's keeping debt in check give him the money he repaid as a start to his savings.

When I looked on the debt forum for advice - ie how to pay, I have seen time and time again that bailing people out doesn't teach them budgeting.

If anyone has helped friends or family in this way and has suggestions on how to handle this before I speak to the lad I'd be grateful as this is new territory for me.

He's not your friend though is he! He's a friend of a relation of yours and I think you should take advise :

Never lend to friends or family unless you can afford to lose that money or give it away as a gesture. With the best of intentions on both sides you are unlikely to get that money back, unfortunately.:o

princessdon

Boots888 wrote: »

He's not your friend though is he! He's a friend of a relation of yours and I think you should take advise :

Never lend to friends or family unless you can afford to lose that money or give it away as a gesture. With the best of intentions on both sides you are unlikely to get that money back, unfortunately.:o

I don't care if I get it back - It's the price of a haircut and manicure to me. I said in my OP I;d never lend to friends or family with the expectation of getting anything back.

As it happens it went as well as I thought. I am not a charity case, you and your family have already done enough for me, I'm a grown man I can sort it etc.

I've transferred into his bank account - what he does now is his concern. He can either make payments, leave the money under the TV or do nothing.

He was a bit cross at my suggestion - but if he uses that anger and pays me back (getting savings he isn't aware of in the process) then he'll avoid PDL for ever.

princessdon

Primrose wrote: »

Help him if you feel you must or your conscience dictates, but don't let him have it as a gift. Your gift to him would be in saving him the huge amount of interest a pay day loan arrangement would involve. Sit down with him and work out what he can afford to repay you on a monthly basis and tell him that you expect him to keep up the monthly payments without missing any for other indulgences which he might feel he is entitled to. A helping hand on this basis should be treated as a debt of honour, and if he knows what's expected of him he may be more likely to start accepting responsibility for managing his finances in an adult way.

That's my hope the money back is my incentive to save. He's never had more than £20 in the bank on each pay day.

Given his high income for his age and low outgoings (he still lives with his grandma) he has no excuse for living wage to wage.

I want him to save and if I can help (like I do with my Nephew) then I'd like to.