AIBU to be reluctant to lend cash to a friend in need?

Inthesleeplessnightgarden · 2012-01-23T08:28:55+00:00

Will try and keep this short... Good family friend,(was best man at our wedding, is DS's godfather) is in financial strife. Having been made redundant from a pretty good job started taxi driving. Now transpires that he had the car on HP and has missed payments and the car has now been taken so he can't work. He owes six grand which is about a quarter of my savings. He also owes on a mortgage, he has two kids and his wife works part time. He called my husband ( is his friend really) for help as apparently his family can't. We, or rather I have the money, but....... We might need it soon as DH's job isn't secure beyond the summer. And I work bloody hard to save that kind of cash and can't afford to lose it. I am a definite subscriber to the never a borrower nor a lender be school of thought, but would feel dreadful if the kids were to suffer, e,g, if they lost the house too. What would you do?

giveyourselfashiny · 23/01/2012 08:31

Keep my money. Especially if your husbands job is not totally secure.

TubbyDuffs · 23/01/2012 08:31

Only ever lend money if you can manage to never get it back. Personally, I wouldn't lend it, your own future earnings are in question, and I doubt (unfortunately) that he will be in a position to make decent payments back to you for some time.

He doesn't need to know you have savings, you just say no.

lolaflores · 23/01/2012 08:35

Keep your hand on your cash. Let him find out ways of organising his debt without getting into more debt with friends. He is only putting the inevitable on the long finger. Either he declares himself bankrupt and sorts out his creditors. Borrowing more money is not the answer. and sure as fuck you would never see it again. same thing nearly happened to me. Friend with money probs asked for 10,000, all my savings. Husband very unreliable but was still in work. I said no. Guess what? Husband lost job next week and has not worked a day since...that was 3 years ago.

LydiaWickham · 23/01/2012 08:36

How would he pay this back? Short answer is, only give money, never lend. If you gave this money, that would leave you with a £18k safety net, if your DH lost his job, how long would that last? How long would it take for you to save another £6k? That's not a large amount of savings to be honest if your DH does lose his job, you could go through that very quickly.

I wouldn't lend it, but we are in a different situation and I would find myself gifting it (even if officially we called it a loan, I'd not expect it back in those circumstances).

What does your DH want to do? Does he see his friend ever giving the money back? Does the friend's wife know he's asking friends for a loan?

squeakytoy · 23/01/2012 08:36

My rule is, only lend when you can afford to lose. In this situation you cant, so dont do it.

RubberDuck · 23/01/2012 08:36

Don't lend.

If you can afford to give him a gift, then do so, but have no expectation of getting it back.

Lending wrecks friendships.

QueenOfProcrastination · 23/01/2012 08:36

If you can't afford to give the money away then don't lend it. It is very possible that he will be unable to repay you so if you do go ahead, be prepared to lose the money. Even if he does repay you, be prepared for the friendship to never be the same again - especially if you have to "remind" him about when repayments are due. Friend will feel beholden to you, you may feel yourself trapped by judgeypants every time they make a new purchase / go on holiday / treat their kids when you may be still waiting for repayment of your money.

IMO (and, unfortunately, IME) much simpler to regretfully refuse (state the insecurity of your husband's job if you must, but remember that "no is a complete sentence") and deal with any temporary awkwardness between you rather than ongoing tension as the relationship has shifted from equal friends to debtor and creditor.

QueenOfProcrastination · 23/01/2012 08:37

BTW if friend decides to be difficult if you refuse, then not such a friend in the first place. Again, unfortunately, voice of experience.

whatsallthefuss · 23/01/2012 08:37

It depends on the strenght of your friendship. i recently came into a bit of money...not even a months wage, and spent a large chunk of it on a washing machine for my bessie mate.

now i'm unemployed and that money means a lot to me, but she is a single working mum, doing her best to make ends meet, and handwashing for 3 kids. she cant get help from anywhere else.

if i had enough food for 6 meals, i'd share it out between us and we would all go hungry together afterwards, rather than my family be ok now and hungry in two meals time, and her family be hungry now

having said that, she is my BEST mate. I have a brother and sisters that i wouldnt necessarily do this for

MoreBeta · 23/01/2012 08:39

You can best help your friend by advising him to go to CAB and begin the process of declaring himself bankrupt. In the long run that will be the best way for him to deal with this problem. He will be more financially secure in the long run if he declares bankruptcy now rather than drag it out.

Do not lend him money you will need. It wil not help him anyway.

mercibucket · 23/01/2012 08:40

He needs money but what for? Would he put it towards the mortgage? The hp? Food? Is he signing on and so mortgage interest will eventually be covered? Can his wife work more hours? Will he be able to pay you back?
Really difficult. I would always try to help but not if it was just throwing my money away eg hp on car that is already repossessed. Doesn't sound like six grand would get him far tbh. Perhaps your dh could sit down and help him look through his finances and direct him to cab or similar? Short answer - in this case no I wouldn't. Any loan should imo be one you can afford to write off and in this case you would have to. You can't afford to

mercibucket · 23/01/2012 08:40

He needs money but what for? Would he put it towards the mortgage? The hp? Food? Is he signing on and so mortgage interest will eventually be covered? Can his wife work more hours? Will he be able to pay you back?
Really difficult. I would always try to help but not if it was just throwing my money away eg hp on car that is already repossessed. Doesn't sound like six grand would get him far tbh. Perhaps your dh could sit down and help him look through his finances and direct him to cab or similar? Short answer - in this case no I wouldn't. Any loan should imo be one you can afford to write off and in this case you would have to. You can't afford to

RubberDuck · 23/01/2012 08:43

Perhaps you could get him this book: Total Money Makeover

It's rather American and evangelical (sometimes literally, the author is a Christian), but the principles are sound and a good handbook for getting out of serious debt. We're currently working through it (and are on baby step 2!) and I'd recommend it to anyone who has always been a bit crap with money.

Thumbwitch · 23/01/2012 08:46

Just purely from your thread title, YANBU, don't do it.
Never lend money that you cannot afford to lose - because chances are you will lose it.

A friend of mine lent a long-term and very dear friend £10k several years ago and she has never seen a penny of it back; they aren't friends any more either.

TotemPole · 23/01/2012 08:51

It takes a while for it to get to the repossession stage doesn't it? Don't they need to go to court?

I wouldn't lend the £6k. Maybe you could ask what he needs the money for and offer an amount that helps, but you can afford to lose. If he's let his debt problems get this far he's unlikely to be a good for repayments.

Piggles · 23/01/2012 08:57

I absolutely would not lend money to anyone. It rarely goes well in my experience and is more likely to ruin relationships than a refusal to lend.

Is this friend aware that you have savings? And how much they tally up to? Or is he just looking for help anywhere and everywhere? Because if he is unaware, he may well be even expecting you to say no and it was just a shot in the dark for him. In that case just say no and try not to feel bad. It is his life and his problems, you need to look after yourselves - especially if your husband's job is not secure.

If he knows you have money and roughly how much then it will be harder for you to say no - but do say it. You will almost certainly end up really begrudging it and wishing you'd kept your hard-saved pennies. If he is any kind of friend he should be able to appreciate that handing over your savings to him is just not going to happen when you may not have a financially secure future yourselves.

If you feel that you need to make the refusal go down a bit easier make up a fib about the money being invested for a fixed term and being unable to access it before the end of the time period without taking substantial losses - so you have a valid excuse to not be dishing out your cash... beyond that it is YOUR cash of course and you don't have to lend it to any Tom, Dick or Harry who wants a slice of it.

givemeaclue · 23/01/2012 09:15

Don't do it - you may never get it back and that would cause serious problems in your friendship. Think about how many hours you yourself have to work to earn £6k - if you give that to him you have basically worked those hours for nothing. Thats your rainy day fund/college fund/roof blows off/lose your job fund. I speak from personal experience here, loaned someone money in very similar circs with agreed reasonable pay back arrangement, never got a penny back.

presumably your friend got redundancy money - what happened to that>? TBH it doesn't sound like your friend is that great with money e.g missing HP payments and losing the car. Bailing him out could destroy your friendship in the long run. AFter this £6k whats to stop him coming back and asking for another £6k? YOu have to say no at some point. Also - losing the car doesn't mean he cannot work, it just means he cant work as a taxi driver - he can still do other work! I think you should support him in structuring/managing his debt (e.g CAB, debt advice centre) and in finding another job but DONT give him the money.

You sound like a great friend, but to keep a great friendship you have to walk away from loaning money in this case. His financial issues are HIS to sort out - not yours.

IUseTooMuchKitchenRoll · 23/01/2012 09:19

Don't do it. It would be a very stupid thing to do to yourself and your family. If a bank wouldn't lend him money, there is a good reason for that.

How do you expect him to pay it back?

BrandyAlexander · 23/01/2012 09:20

Don't do it, and I say that as someone who as seen it from the other side of the coin. When our family were in dire financial straits many years ago, a good friend of my mothers lent her the money to keep the house from being reposessed. It just delayed the inevitable, but that money bought us extra precious months in the house during an important school year. Also, the dire straits were not of my dm's doing (got df to blame for that) and she is excellent at managing her money, and, dm is a woman of great principle and made damn sure that she repaid asap. I always be grateful to dm's friend for helping out like that, but she didn't need the money (she was well off), she wasn't lending to someone who was feckless with money, and the borrower (dm) never asked for the money. This is sooooo not the situation here. Seriously, don't do it.

ENormaSnob · 23/01/2012 09:22

Not a prayer would I lend this money.

Original poster

Inthesleeplessnightgarden · 23/01/2012 09:22

Thank you so much for your speedy replies and for making be feel less mean and uncharitable!
In answer to a couple of questions raised - the £6000 is what is owed on the car, so in theory if he paid it and got the car back he could work and therefore begin to pay it back... but that does beg the question why the repayments weren't made before. I suspect he probably wasn't pulling his finger out and doing enough hours.
Does his wife know he's asking for money? Good question, my husband doubts she even knows the state they are in, though will no doubt suspect soon when the car doesn't come back from 'the garage'.
I agree with many of you who suggested that unless you can gift then don't lend it and am considering how much I can afford to gift. And if it ever gets paid back then considering that as a bonus.
Does he know we have the savings? I don't know, but suspect we're seen as better off than many of his friends - after having spent years working in various godforsaken parts of the world we've been lucky to be able to save, but it does mean our income is less predictable than we'd like. And we have a mortgage and a family to support ourselves.
My husband has encouraged him to go to CAB and to sort out some debt counselling. And suggested that his wife tries to get some more hours.
As always, your wise counsel is much appreciated. Thanks

OP posts:

pigletmania · 23/01/2012 09:30

YANBU at all, I would not lend the money especially as your dh job is not secure and its your savings for a rainy day. You also have a family to support and think about. You have to be prepared not to get it back too, it could happen, I've seen it a lot on here.

TotemPole · 23/01/2012 09:33

Inthesleeplessnightgarden, would he get the car back? At the stage of repossession isn't the contract terminated, then they work out what is owed.

He needs to go the CAB or contact one of the debt charities, CCCS, Payplan to ask for advice. He's probably panicking, getting letters and phone calls. If he phones CCCS they'll give him a reference number and arrange to phone back a few days/week later to go through everything in detail. But at that point he can say to any creditors, he's taking advice from CCCS, then give the reference number. That should be enough for them to put the account on hold for a few weeks.

For the mortgage, see if it can be switched to interest only for a while.

Has he contacted the benefits office/tax credits to see if they are eligible for anything?

aldiwhore · 23/01/2012 09:38

If you're sure he'll pay it back, and if you make sure you get his agreement in writing, then I would.

We were in desperate times a few years ago and our dearest friends (also best man man/mate of honour at our wedding) bent over backwards to loan us cash so we could pay our rent... as soon as we could we paid them back. It wasn't nice for either of us really, and did affect the smooth flow of our friendship for a while (nothing dramatic, just awkward) but because we paid them back ASAP our friendship has definitely gone up a notch.

You can help in other ways too, but if he needs X amount to get him back to work, and you have it, then I think it would be a good thing to do... its a gamble though.

CogitoErgoSometimes · 23/01/2012 09:43

YANBU. Best way to be an ex-friend is to lend a friend money, unfortunately. If he has a good business proposal, a bank would lend him the money. If it isn't good enough for a bank, you shouldn't take the risk - especially with the job situation the way it is. If he's got debt problems, taking on more debt really isn't the way out of it. Agree with the suggestion to point him in the direction of CCCS, CAB or National Debtline for professional advice.