Lending money to family

If I could afford it (and we were close), I’d probably gift the money but I’d want to know more about the circumstances. How did the arrears build up…was it a genuine shortage of cash or was it poor money management? And the biggest question would be if you paid it off, how would she prevent it from happening again?

It's not unreasonable though as you need to help her by ensuring that she's claiming everything that she's entitled to - CMS, UC including housing element, Council Tax benefit etc. She will also likely be entitled to get social tariffs / reductions for energy, water & Internet etc bills.

Also by taking a look at her budgeting ability it will enable to see whether lending her the money is viable or just delays the inevitable by another month. She should also contact CAB for assistance- both financially and by them advocating for her.

If you can easily afford it then I'd pay it directly to the landlord. Realistically there is no housing help for tenants who make themselves homeless in this way so there is no safety net for her and her children.

For me it would boil down to would I pay money I could easily part with to ensure those children keep a roof over their heads? So I absolutely would.

I know so many families relying on foodbanks at the moment, the cost of living crisis is horrendous. Meeting every bill just isn't possible for a lot of working families right now, especially a single parent who receives no financial support from the non-resident parent.

A) No, you will not get any of this money back.

B) What steps is she putting in place to ensure this doesn’t happen again, and she’s back in arrears, facing eviction? No point in gifting the money now if this is merely kicking the can down the road for it to happen again.

I would lean towards no. It would also depend on her other support network - does she have parents that could house her? Why are you her first option? Why does she need money? Illness/unexpected expense vs holiday/designer clothes/eating out?

Money ruins relationships - so either gift it to her with a “this is a one time thing”, and mean it! Or say no. Don’t loan it and then get resentful when you know she’s not paying it back but buying other things.

It's a lot of money, but it's more than that. She's not able to budget or the cost of living is just too high for her which a lot of people are facing.
Is there any way she can get herself on a social housing list? The rent should be considerably cheaper than market value.

If you want to help, I wouldn't lend the money, I would gift it. (I don't lend anymore, I just give if I want). It stops ill feeling. But I think you're putting off the inevitable mess she will be in again in the not too distant future.

Exactly this!

If she can pay you back on top of her monthly rent then there's no reason she can't pay the landlord back.
If she's planning on continuing to not pay her rent and only pay you the £200 each month then in a year she will be in the same place (if she isn't evicted by then)

I would want to see a full financial disclosure showing how it would help and what her situation is going to be going forwards.
If you think she can genuinely use the money to pay off the arrears and that she will then be sensible enough with her money and afford her rent then that's one thing, but there's no point in just throwing it down the drain for her to end up in the same position again

If yoy give money, pay the LL directly. However if she can’t stick to a payment plan she isn’t going to pay you back

It depends how much you want to help her. You're not under any obligation and probably wont get it back.

It’s a gift. If I cared about my cousin yes I would give it to her, but I’d make it clear that it was the only time, and she needn’t worry about paying back but could I help her rework her budget? Maybe she needs that kind of help too so she isn’t in the same position three months down the line.

The only circumstance in which I'd lend a family member money is a short-term emergency not of their own making.

In this situation, she has a long term pattern of not being able to pay the rent.

She's also not able to abide by the payment plan set up.

There's no way that her finances are going to change so that she can suddenly pay rent + £200 to you each month. The most likely outcome is she'll pay nothing back to you and immediately get back into arrears with her landlord then come back with her begging bowl.

She needs to find her own way out of this hole.

No, I think debt between friends/family leads to problems. I would give her the money though if I could afford it. But if you do that you must never think of it again or query any of her expenditure.

If you can afford to write it off I think you should say, with kindness, that you will give her the money but it is a one time thing and wont happen again.

She probably feels desperate and terrible asking, punitive & intrusive demands to see her finances would be even more humiliating. But - you could ask if it might be helpful for you to go through her finances together to see if there's things you could recommend to help.

She hasn't paid her landlord. She may or may not pay you. It's fine to give away money without expectations. I think it's the expectation of getting it and then not being repaid which is hurtful. On the whole debt is a complicated issue. I'd wonder why she got into debt. What does her budget look like? Paying the landlord direct could be a good idea. She's under no obligation to talk to you about her situation and do you want to be that involved? She doesn't sound as if she is actually being upfront and honest about her situation. How will you feeling she is in the same situation in a years time? How will you feel if you pay the debt and the Landlord evicts her anyway? It would be understandable if he did

If I could afford to gift it to her, without the expectation of getting it back, then I would only offer it on the condition that I pay the landlord direct to clear the arrears, and that it would be a one time gift. Maybe she needs some budgeting help, there are a lot of places that help with this, citizens advice , for example.

Any money given is just kicking the eviction can down the road for a few months. You're better to offer practical help and support to get rehomed.

After having my fingers burnt and still burning as I’m paying the loan I would never ever lend money again to friends or family

i struggle and begrudge every months payment

you say you can afford it but I think you need to look on it as a gift and it won’t be repaid back - but if any does it’s a bonus

as she has let her LL down and risked losing the roof over her kids head , so why would she bother paying you back

giving to LL is a good idea and be interesting if it is that amount

going forward - how will she pay her rent ? Is it too much for her via her income

will the same thing happen in a years time and she will want to be bailed out again

To add, I’ve seen this dynamic play out with people I know well and it killed off the relationship. Borrower has an excuse every other month about why they can’t pay this month and just expects lender to accept this. Lender gets annoyed when money spent on non-essentials (nights out, nice clothes, new tech, nails done) then 2 weeks later borrower is pleading poverty. Borrower feels treated like a child and gets annoyed if this is raised. Lender thinks borrower has priorities wrong and is taking the piss. Relationship breaks down.

Yes I would help a family member to prevent eviction and homelessness or temporary accommodation.

However, I'd want to see evidence that this debt exists and is not a debt for some other (frivolous) reason. I'd get copies of the notices from the landlord, and the details of the amounts due.

If all is above board then I'd arrange to pay it directly to the landlord. I would not give it directly to her.

If she can’t afford, or doesn’t prioritise, her rent each month, she won’t be able to afford to keep paying the rent and pay you back. But sounds like whether due to cost of living or poor prioritisation she can’t afford her current outgoings.

Cleanest to say no now tbh. Otherwise either you poke in her finances and likely say no, or you lend it and it will likely lead to problems down the track when she doesn’t repay you, she gets annoyed with you (unreasonably but happens) and you with her.

Different if, say, she had been made redundant or had a big financial hit and she is now back on her feet

I’m assuming that you are close & that she can’t borrow the money from anywhere else. Also, I’m assuming that getting herself rehoused in the current climate will be difficult & that she won’t be able to afford the costs of moving, a deposit, rent in advance etc. - plus the impact on her children of course, possibly including new schools etc etc.
If you can afford to give it to her then do so, out of kindness.
As PP have said, she needs to be aware that this will never be repeated

Offer to help her with budgeting as she sounds like she needs that.
You say the father doesn’t pay for his children. Time for her to contact CMS and make that happen!

Best wishes to you all x

eta - offer the help rather than force it as a condition of the money, as I suspect the latter could be felt as intrusive or infantilising. If she insists on repaying then a manageable such as £50 a month might be sensible, especially if the timing is from when the CMS payments start.

Is there a way of doing it in a "this is a loan but the condition of that loan is we look at your finances together to work out how this doesn't happen again"? It's up front that way. I guess equally she might feel frustrated that you've attached strings. I think I would have to treat it as a gift (in my head).

I leant a friend quite a big sum of money and it surprised me how much it pissed me off e.g. when she was late paying it back but had booked a holiday or whatever. It actually always turned out she had just forgotten and did pay as soon as she was reminded but I didn't enjoy having to remind her. To this day I still don't know why she didn't just set up a standing order and deal with it that day.

If this was me, I would give her the money. I say 'give' and not 'lend' because by your own admission you know you are unlikely to get it back, but as long as you are honestly happy with that and won't resent her for it, then do it. This poor woman is obviously trying her best and think of her kids, what will happen when they lose their home? If you can use this money to help, then I think you should.

If you do lend it to her, you do need to pay it straight to the LL to make sure that he actually gets it.

If you do set up a repayment plan, do a smaller amount over a longer time, so that she can actually afford to repay it. I agree with PP that you should sit down with her and look at her finances before making a decision. It would help you to see what she can afford to repay you and also see if she is making poor choices. If she is blowing all her money on crap rather than paying the rent, then you know not to lend it to her.

She clearly needs some help to manage her finances if she is that much in arrears. Some people don't live in reality, and think that going out, or buying everything they want etc is more important than paying bills. I had a client crying down the phone that they couldn't afford to pay my invoice, while plastering pictures all over social media of them out having a good time every weekend.

Nope nope nope. Just because you can afford it doesn’t mean that you should do it. If she hasn’t been able to afford to pay the rent, she won’t be able to pay you back plus whatever rent she will be paying on another house. I speak from experience; a lot more than £2.5k for a relative who I never thought would let me down. Took 7 years and an ultimatum in the end. All sorts of lies and stories and when they inherited (and sold) a property later, there wasn’t even a ‘here’s a few quid for all the shit we put you through’
Relationship has never been the same since