Risk of paying off a debt for a relative during house purchase?

rosyw

Lending money to family is NEVER a good idea! DON'T DO IT!!!!
If your relative has managed to get himself into trouble, sorry, it's NOT your problem, especially as it could jeopardise your house purchase. IF he will genuinely be in a position to pay it off in 2 weeks his creditors will wait, if he is being taken to court over it, he can pay it off within 28 days and prevent it showing on his credit file. When people are in a really bad financial mess they will do and say ANYTHING to get themselves out of the mire, he won't care if you lose your house over it, so long as HE is out of trouble. It really is NOT worth the risk!

MissusP_2

If your relative can prove to you that he will give you the money back in 2 weeks - he should show that same proof to the DCA surely? It's really off of him to even ask you - don't do it!

I wouldn't even ask him what happens if he doesn't get the money as you'll only feel more guilty when you shouldn't even have to think about this. But you're lovely for wanting to help.

Dan-Dan

Come off it , if a DCA has a sniff 4k is 2 weeks away , a solution WILL be found


DONT BE TAKEN FOR A MUG AND POSSIBLY LOSE YOUR HOUSE

clockworks_2

A fool and his money.....

The_Turtle

I can only echo the advice provided above. This sounds like an unnecessarily risky transaction to have so close to such a pivotal life transaction.

As others have said, if he is indeed capable of repaying this money within 2 weeks, his creditors will be in a better position than yourself to make this judgement and can provide a further 2 weeks, or he could seek finance from a PayDay lender.

In my experience with lending money to family, there is significantly less incentive for them to repay the loan promptly, or at all, as you're unlikely to have any official recourse to have your money returned.

I'd strongly advise not lending the money.

steph2901

I wouldn't risk losing my house either. If they'll have the money in two weeks then surely the debt collection agency can wait that long?

davidmcn

nic_c wrote: »

okay, putting to one side that you will get £4k back on time and that the debt collection agency won't wait, you run the risk of falling foul of the anti money laundering rules. You will have to show where you got the £4k from and need statements from your relative as to where they got the money from. Lending £4k out and getting it back 2 weeks later will ring alarm bells. Even if you had sufficient funds to not be dependent on the £4k for deposit, you would most likely have to still show a paper trail of how the money got to you (its irrelevant that its paying back what you lent).

Ask your conveyancer if its okay to do it, because they have to sign off on the money laundering checks, and see what they say. I'm sure it will be no under any circumstances.

This pedantic conveyancer agrees with your assessment!

Keep_pedalling

I am sure a high earner who has depts also has lots of valuable bling they can pawn for a couple of weeks to get them by.

Pixie5740

What does your partner think? If I were your partner I'd be saying, "no way Jose!"

Your relative has a high paying job but is so poor at managing his/her finances that a debt collection agency is chasing them. This isn't a new bill but something that should have been paid some time ago.

-taff

To answer your question, yes you are putting yourselves at considerable risk.
If the 4,000 was spare money you didn't need then pay it, but as it's our deposit and stamp duty money, don't do it.

A DCA will wait another two weeks. Post on the debt free wannabe board for more info regarding DCAs