Withdrawing the offer of a loan

[ChrissieKeller61]

So very good friend, we’ve lent each other a grand or so over the years both always paid back on time. Complete trust.
She needs £7000 to get out of £28,000 of debt on an Iva.
Currently working full time with kids her life is difficult tbh.
We discussed this, I have about £5,000 I was prepared to lend her which I’ve worked hard for and £2,000 of that is my overdraft, she will cover the charges for when paying me back. Not as though this money is just lying around though.
I want to withdraw the offer and this is why. She’s still spending. This weekend it was another £500 on home improvements. Sensible in theory. But why am I going without and living frugally to help her out when she’s not helping herself.

"If you can't afford to lose it you shouldn't lend it" is my motto. Please don't lend her your money. The amounts, the IVA and your friendship are all incidental facts - the real issue is that it is your money! Withdraw the offer, say you are sorry but you cannot afford it.

@ChrissieKeller61
I was sat here this morning thinking of solutions but have decided to just keep my mouth shut

Please repeat after me, “Not my circus, not my monkeys.”

So you were planning to go overdrawn to help her. So not only would she be in debt, but so would you be. Madness! Good advice in reducing overdraft limit.

Just text her saying sorry I'm not able to lend the money in more but good luck then block on all avenues. Not your monkeys not your zoo.

Gee she’d be round knocking the food if I blocked her

Don’t block her. But you must withdraw your offer and tell her ASAP.

Door not food

Tbh her life is just so shit. I feel terrible enjoying myself when I can see 10 years of all this ahead of her I suppose

It would be less than 10 years if she wasn't pissing £500 away on unnecessary spending.

Wouldn't you feel terrible spending £70 a month on overdraft interest and potentially losing £7,000?

Just tell her you need it for a holiday

A quick google on how IVA’s work shows this:

ivainformation.com/already-in-an-iva/can-i-settle-my-iva-early#why_settle_your_iva_early

The basis of an IVA is that you pay as much as you can afford after essential bills and a minimal ‘spends’ allowance, for 5 years, and as long as you stick with the payments then the remainder is written off. You can pay off early if you come into a sum of money sufficient to pay the remaining payments and all the lenders agree.

If 7K is enough to settle the IVA 7 months in, then the agreed monthly payment must be £132 (£7000/ (60-7)). So if she is in a position to save £300 per month then she has lied to the IVA people about her income. If her income has increased by £300 per month, she should have told the IVA people about it and it would then be used to increase the payments, so the lenders get a bigger proportion of their money back.

Just don't answer the door. She's not your friend op

Never never never
Lend money ,you can’t afford to give away .

Absolute madness to get yourself into debt so you can help someone else get out of debt.

Christ I'm glad that you saw better of this... there's no way that she doesn't know that she'd be throwing £7k of your money into clearing a bit of her IVA, but it would never have worked as she told you it would. She may have wanted to believe that it would, but it will have been explained to her how it works..

And to be honest, she doesn't sound ready to make a change yet. She's still wasting money. Until she realises what she's doing and finds a way of managing money that works for her, she'll burn through any money that she has, whether it's yours or anyone else's.

I like to solve problems too. I went through a period of paying my friend's rent and food while she was drinking her money away... but it didn't help. I had to stop paying it all so that she had the eviction meetings and the council tax summons etc before she'd stop burning through money (and alcohol!). You can't save people from some things...

If you don't think you can just cut her off, just start easing up contact.

Apart from the fact it would be madness to lend her the money from your POV, actually it would be bad for her too.

She’s going to have to have the brakes out on her as she can’t seem to put them on herself and it looks like it’s going to take an ‘Authority’ of some kind to do it

Don’t get financially involved.

If it was my friend, I’d warn her and be there to help her put her life back together when it explodes, but not get financially involved.

You will never see a penny of that money again.

Melvinsmum2020 I know what you mean. I am in a very similar situation with a BIL that had every "situation" happen to him over the 40 years since he became an adult- requiring propping up from parents. If one "situation" didn't work, he'd come up with another. Master manipulator. Now parents are gone and the inheritance won't last long. I'm dreading the coming situation (and cursing my in laws for creating a monster). Dh will take the brunt and swears he won't cave...

I don't understand why she needs a loan of money for an IVA. You don't pay a lump sum, you pay a small manageable amount each month over. A period of about 5 year out of your budget. They work out what you can afford. They don't take a lump sum. The same applies to a debt recovery plan. Even a debt relief order only charge a £90 fee to keep you on it for a year, wipe of your debts but is only available up to a certain level of debt. Bankruptcy itself isn't that much . So unsure what your friend needs 7 grand for. Maybe you should be querying that not wondering whether you should give her it. Also on an IVA she won't be able to get any further debt out and any big purchases would need to be cleared with them because she shouldn't have the money to do it. All spare money goes towards the debt if she comes into money she has to declare it and it will be split between debtors.

You can make them a full and final settlement offer @Bekstar

An IVA means she’s shit with money , please don’t give her your money !

If she was Torry and pay £7000 towards a £28000 loan she wouldn't achieve much. A lot of it would go towards fees for the set up of the IVA and the rest would be shared out between creditors. They have signed an IVA and it still has to be complete and the outstanding £21000 will still be due. In fact it may void the IVA and make it due instantly. At best they will reassess her payments and make them slightly smaller each month but she still has to carry on teh IVA. They won't accept a lesser amount this early into an IVA. Sounds to me like she has realised that an IVA stops her getting credit anywhere and wants that out the way. In which case she is in for a shock because it's on her credit file now for the next 6 years regardless.

She’s under the impression they will take the settlement who knows eh ?
She started looking into this in August and I don’t even know if she’s signed up yet, she could still be paying the debts. I don’t see how else she’d have £500 spare.
Anyway not no problem

ChrissieKeller61

Yes I know a full and final settlement can be made but she is on about offering £7000 for a £28000 debt. That's not. A full and final settlement and they'd not take it as one.

Not my problem I meant

Bekstar - none of know what’s they’d accept. I worked in collections 30 years ago and we take 25% if we thought that’s all we’d get, 50% they’d snap your hand off