or would you be offended

[unreasonableme]

if I were to lend you a fairly substantial amount of money, and asked for something in writing to prove this transaction had happened?

Background: Very good friend of mine used to have superb credit rating but life happened and she lost her house and went bankrupt.

I have lent her money in the past, and always had it back, with interest, so I have no worries that she won't pay me back. She now needs a new car and said she'd get a loan, but I suspect she won't be able to get one, and offered to get one for her. Surprisingly she's said she would if necessary which I'm happy with. I don't drive so get benefit of her having a car (she'll give me lifts, do a huge shop etc) and never pay her money for petrol etc.

The only thing I'm concerned about is that she's hit by a bus a day after buying said car, her family gets the car and I'm stuck with the loan. I'm sure they'd believe me if I told them about it, but I'd rather have the backup.

I know it's unlikely this scenario would occur, but I just feel I should be sensible about this.

Comments anyone?

My Aunt bought a house in my cousins name and said cousin sold the house right out from under her Mum. You can NEVER be too careful.

I wouldn't do it. It's very kind of you to offer, but apart from the fact that things happen and you could be stuck with paying off the loan with no help, you are asking for trouble when you say she would give you lifts etc.

Would she be obliged to do that whenever you asked? You both have your own lives, I can't see how one of you would end up feeling at least put out by the other because she didn't want to do a particular lift, or because you wanted her her to do a lift when it wasn't convenient for her. I really can't see that working, no matter how close the two of you are as friends.

I don't think there's a problem with her owning the car though, as long as it's made clear to the bankrupcy people what is happening. You are allowed to own a car as a bankrupt, sometimes they don't include it in the bankrupcy if you need it for work and it's not worth much.

Also, my cousin went bankrupt. He had a car worth £7000, and his parents were able to pay the £7000 to the bankrupcy people and give it straight back to him. The bankrupcy people didn't care as long as they got the value from it once to be added to his payment.

More things to think about, I see.

Hadn't considered the fact it might be illegal. Shall look into that. Friend has gone through the x years post-bancruptcy to put herself in the clear (other than the fact it's on her record) which is why I hadn't really considered the legal side of things. Will talk to my financial advisor about that. Should also say that we're not in England, and the laws concerning such things are slightly different here.

I am fully aware of the reasons why friend went bankrupt in the first place - (I stuck my nose in at the time and read all the paperwork) and it is unlikely to happen again. I really am not going in to this naively, though I'm aware it probably sounds like it.

JanuaryJoJo - your suggestion of my buying the car and owning it legally did occur to me. I think, if this goes ahead, I might do that. Thanks.

Of course, this could all come to nothing as the person in question may be able to find a bank willing to lend her the money straight. As I've said, the bankruptcy is behind her, I'm just thinking about the worst-case scenario.

There are rules about what you can spend as a person who is bankrupt but only for the time that you are undischarged which is usually a year at the most. For most private citizens it is six months. Sign of the times and your name isn't even published in the local paper these days because it is so very common.

Yes it does stay on your credit rating (assuming you care about such things) for longer than that but the period of time during which you can be "inspected" is very short.

The assessors which are called "Official Receivers" do not come round to your house at any point. I've done it and so have several other people I know. They may watch your bank account in order to check that several thousands of pounds do not suddenly appear but they are court officials / administrators and not bailiffs.

does your friend really need a new car? and is it a new car or do you mean she needs to replace her car and couldn't it be done very cheaply? local car auction sell perfectly good, but older (maybe 10 years or so) cars. my first two cars cost £400 each.

I wouldn't go near this one with a very long bargepole. Can she get the loan and you be a guarantor if you are determined to help her? What about her parents, can they guarantee the loan?

When I say "new car" it would just be new to her, ie second hand. But it would be doing a lot of miles, and she needs it to be fairly large for her work.

The bankruptcy was about 4 years ago, so she should be clear on that point.

What's the situation with guarantors? Would that make my friend more likely to be able to get a loan in her own name?

IF it were your name on the car but she was driving it, and it was stolen/damaged/written off, then you'd have a huge problem. A much more delicate situation than the one you're discussing now.

I'd withdraw your offer with all apologies. Lend her money for a car if you are happy to do so and would not mind if she can't pay you back. But do NOT go into debt for her.