Active discussions

Meet the Other Phone. Flexible and made to last.

Meet the Other Phone.
Flexible and made to last.

Buy now

Please or to access all these features

Talk
AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Withdrawing the offer of a loan

325 replies

ChrissieKeller61 · 02/02/2020 09:04

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.

OP posts:
saraclara · 02/02/2020 09:34

Never, ever get into debt to help someone else. Not under any circumstances. And doing so to help someone else pay off THEIR debt, is, I'm sorry, absolutely batshit crazy.

What hold does this woman have over you that you agreed to that in the first place?

MollyButton · 02/02/2020 09:35

Never lend money you can't afford to say goodbye to

And you would be insane to borrow money (eg. and overdraft) to lend to someone else. Especially as the rules on overdrafts are changing and they will be a lot more expensive soon.

Go and get yourself some financial advice - you seem very financially naive.
Even if everything went well - you would stop being a "friend" to her and start to be a "creditor". You are already starting to view her as a "debtor" as you are judging her spending.

An IVA is worked out carefully to help the person repay their debts. Them changing who they owe part of the debt to doesn't help them at all.

MrsElijahMikaelson1 · 02/02/2020 09:35

Don’t do it! Why go into debt to pay someone else’s debt who then can’t pay you back?

eddielizzard · 02/02/2020 09:37

I don't think this is a good idea.

But I would still ask her why she needed this appliance / spent £500 on home improvements and whether she's managed to save the £300 she was supposed to.

It might be that she has, and the £500 has come from somewhere else.

Given that you were happy to help her out, and she has been reliable I would at least find out all the facts.

Having said that I wouldn't have offered this money that you clearly can't afford if you're having to scrimp and save to help her. It will only lead to resentment, and already has!

Original poster
ChrissieKeller61 · 02/02/2020 09:37

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

OP posts:
LouHotel · 02/02/2020 09:37

Good god purposely going that deep into an overdraft just before the changes to the charging system is pure madness!

Tell her your car or boiler has broken down and needs a massive repair if you don't want a difficult conversation. Also both of those things can happen so why would you remove your safety net?

Pilot12 · 02/02/2020 09:38

Overdrafts should only be used in emergencies, not lent to friends. What happens if you have an emergency, your boiler breaks down or your car needs an expensive repair, you're stuffed.

Tell her now that you miscalculated and just can't afford it.

AlwaysCheddar · 02/02/2020 09:38

No way, this is too much.

comingupafterthebreak · 02/02/2020 09:39

You have to stay out of this. She is appalling with money.

The whole point of an IVA is that it is supposed to make it straightforward for the person to repay the debt, but they have to play the game and do it properly, not go out spending money on things that aren't essential. Every spare penny they have should be going to clear the debt.

She is taking the piss, and she'll never change her ways unless she is forced to. Perhaps bankruptcy might have to be the answer.

RitaTheBeater · 02/02/2020 09:39

You were mad to even consider this in the first place. You don’t have the money to lend her.

You are talking about these home improvements like they are akin to spending the money on saving the life of an orphaned baby panda. She and her husband decided to buy this money pit of a house. They need to save for the improvements and manage living in not too ideal circumstances in the meantime.

I’ve a friend who did this. Slowly a S by doing a lot of it themselves. Their toddler was in a room with no floorboards and he had to balance along a plank to get out of his room but now, an decade later, they live in an amazing home that is bigger and better than mine in a better area.

Poppi89 · 02/02/2020 09:39

My opinion would depend on what the new appliance was for, did her oven break so she needed to get one immediately or did she just fancy a change.
I never loan anyone any money that I cannot afford to have back as so many times I have heard trustworthy family/close friends being lent money and then never get repaid.
To be in that much debt she must not manage her finances well so I would be worried about lending her that amount of money and getting any of it back.
She is also obviously going to put new appliances, home improvements etc before repaying you and her idea of necessary purchases may be completely different from yours.

If this was me I wouldn't do it.

Runbitchrun · 02/02/2020 09:40

I don’t understand this at all. In an IVA you pay a monthly sum that they determine you can afford after consolidating all of your debts. You don’t need to come up with a lump sum.

LIZS · 02/02/2020 09:41

She sounds financially dubious and will not be able to cover your costs. She has 28k of debt and you propose to go into debt on her behalf ConfusedSometimes people can only learn when others stop bailing them out and enabling a lifestyle they cannot sustain.

NotEverythingIsBlackandWhite · 02/02/2020 09:42

I feel terrible enjoying myself when I can see 10 years of all this ahead of her I suppose
The 10 years is of her making. All she will learn, if you lend her the money, is that there will always be someone else around to take responsibility for her bad decisions. She will never become financially responsible if you do this. You aren't doing her any favours.

JayAlfredPrufrock · 02/02/2020 09:42

Please don’t do this.

Your friend has got into debt. Don’t put yourself in the same position to help her.

Iloveacurry · 02/02/2020 09:43

Seriously, no. Withdraw your offer. Spending £500 on home improvements when she’s meant to be saving is not on. You’ll never see the money again.

AriadnesFilament · 02/02/2020 09:44

Her life being shit is not your fault or responsibility to fix. Be sensitive by all means. Be there for her as a friend, but not as a chequebook.

Universalcreditwoes · 02/02/2020 09:44

No op it really isn't how an IVA works. They pool it all together and she only pays a fraction of the total debt over 5 years. The remainder is written off. If she pays them a lump sum then they will expect a payment plan for the remainder. She either doesn't understand or is losing to you.

SunOnAll · 02/02/2020 09:45

How would you feel if you handed over the £5000 and she books a nice holiday?

Then how would you feel if, after a few months, she drifts away from you as a friend and stops paying you back?

How would it feel to know the money hasn't been used to pay her bills, she withdraws her friendship, ghosts you and then you're the one in debt?

If you're cool with that, then sure, go ahead. But honestly no one in their right minds would do this. It's beyond stupid to consider it, to be honest.

Her debt, her problem.

Isleepinahedgefund · 02/02/2020 09:45

I worked in Insolvency for many years. Borrowing money to settle debts is not a good plan. Someone else borrowing money on your behalf is even worse.

Has the iVA supervisor/creditors accepted the agreement on this basis? I highly doubt it. They want to know where the money is coming from, and why should they accept a partial settlement when she’s agreed to pay you back in full? If she has a property she should use that to raise the money - that’s quite common in IVAs.

For so many reasons, I literally can’t fathom why you would even consider this. If you go ahead with it frankly you’re a fool.

GeeUnit · 02/02/2020 09:46

Maybe she is going to declare bankruptcy and is having a spend up, plus your 2K will get her through the summer.

I betcha she's doing that!

uggmum · 02/02/2020 09:46

The fact that she is in an IVA means that she shouldn't have money bro squirrel away each month. If she only took it out a few months ago I doubt that most creditors would accept a full and final settlement at this stage. The fees for an IVA are usually around £2,000 that the insolvency practitioner would have rolled into the debt and is a priority payment.
I would doubt her story of why she wants to borrow the money.
If you are borrowing funds to lend them to her then you are putting yourself into financial detriment.
I am a Debt Counsellor and I deal with IVA, DRO, bankruptcies etc.

Please do not lend her the money

LightDrizzle · 02/02/2020 09:46

You mustn’t loan her the money. You can be a good friend in other ways and if that’s not good enough for her then she is no friend.

Her life won’t improve if she is insulated from the consequences of her spending behaviour. She has clearly learned nothing from the IVA.

SunOnAll · 02/02/2020 09:49

I feel terrible enjoying myself when I can see 10 years of all this ahead of her I suppose

What the fuck? Why do you feel guilty? She got herself into debt. Her money worries are none of your business.

If you want to help her, just be a normal friend by listening and spending time with her, point her towards some free debt advice lines - CAB are very good.

Giving her £5000 is NOT the answer. It will make everything much worse.

CornishPorsche · 02/02/2020 09:49

If she's on an IVA, she shouldn't have £300 a month spare to squirrel. They don't allow for that kind of sum in an agreement.

Tell her you can't afford it anymore, as you need to upgrade your appliances as well.

Swipe left for the next trending thread