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.

we’ve helped each other in the past

Is your friend worrying and fretting about you going into your overdraft on another forum? your friend hasn't hidden the £500 she just spent has she? so clearly she doesnt give a fck what you think about that. Now, youre talking about hiding holidays and feeling sorry for her having to live like this for the next 10 years etc. Well she doesnt appear to feel like that does she? if she did, she wouldnt be spending £500 on items she doesnt really need. As someone else said, she's not being sent to prison FGS, she's being given a payment plan to repay the debts that SHE racked up- why are you feeling sorry for her? Noone held a gun to her head and forced her to spend her money on frivolous items

Crossed post with your update - good luck OP.

I'm in the camp of withdrawing the offer.
She clearly has no issue in you knowing that she's just spent £500 on 'nice to do' home improvement so I'd be equally as honest in sharing your thoughts on this.

I have been in this situation with a family member - dipping into savings and also an overdraft to get them out of a financial hole. Years have passed and I've never seen a penny.

Think about it, she got into debt so badly that she needed an IVA. She hasn't stuck to the terms of the IVA. She cannot pay back what she owes and now you're going into debt to pay off hers whilst she's still out shopping. You're friends spending has clearly been out of control for a long time - please protect yourself.

@ChrissieKeller61 no, that wouldn’t work at all. That’s it how an IVA works. At one month in, they’ll just take that money and forward it to creditors.

Please, please don’t give her money. Tell her you can’t afford it and bank won’t authorise you an overdraft because of the fee changes coming up. She’s lying to you.

You seem to have tied your emotional happiness to her financial solvency. Why is that, do you think?

Does she confide in you a lot? Does she invite you into her misery? Why does she do that I'd she has a husband?

Bluntly, why is she making you guilty for her debts?

I suspect we can see it, sat here in our own world's. I hope you see it before you change your mind and mire yourself in 10 years of misery in some misplaces act of solidarity!

It would be 7 months in @Theh

Withdraw the offer. She’s just proved she’s not responsible with money. Home improvements are a luxury, not a need.

You would be mad to do this. Your in an abusive relationship with her.

I want a hotel Chocolat velvetiser, but I understand I don’t need it. Lend me £100 op?.

@CuriousaboutSamphire you are right of course. Her husband is just as bad, over £10,000 of debt for all sorts of shit, they egg each other on which is why I know more than is normal about her finances and probably vice versa

In fact, stop thinking about her problems and start booking your holiday! Go somewhere fab and have a great time, Op. You are a lovely person and you deserve it.

No, do not lend money you are not prepared to lose. She hasn't altered her spending habits and clearly hasn't accepted she has spending issues. She has an IVA for a reason. Are you prepared to take her to a small claims court to get your money back. Worst case scenario. If not, do not loan.

Never lend significant monies to friends

@ChrissieKeller61
Do you really think she’s being allowed to only pay £9k of a £28k debt? She lying and manipulating you, I’ve never heard of debt reduced by that volume, plus she’s got £500 to waste on an unneeded item,any sane person would put that to the debt!
She’s a user and you’re gullible, where’s her DP in this?

Her husband is just as bad, over £10,000 of debt for all sorts of shit, they egg each other on which is why I know more than is normal about her finances and probably vice versa

And your willing to get into debt and have massive over draft fees for them? When they openly get more and more into debt? Your a good friend OP but insane to hand them £7,000 when they’re so irresponsible with money it’s not even funny. The pure cheek of her even asking you for the money when she’s bragging to you about spending £500 on a new appliance. She’s taking the piss out of you.

Oh I see the DP is as bad, can you not see they are a lost cause? They are not your responsibility.

@ChrissieKeller61 - no, as @Thehop she it doesn't work like that. They might have agreed based on her current expenditure to let her pay back £9k over 5 years. If she suddenly rovks up with £9k extra though, they will take that happily and still take £9k over 5 years (minus however many months until she came up with £9k); if she suddenly gets £20k next year then they'll take the remainder to close her IVA as complete. The point of an IVA is to let her pay what she can afford with frozen interest payments and eventually close the debt, it is not to just let her abuse the system to write off her debt.

Her husband is just as bad, over £10,000 of debt for all sorts of shit, they egg each other on

Yet you were still risking, not just your own money, but going into debt for this financially inept and selfish couple?

I'm glad you're coming to your senses.

Helping her out in this situation would be to buy her a tin of damp proof paint and a scrubbing brush.

If she’s really hard up and you really want to help her, but her some food shopping or something.

Don’t fund her excessive and irresponsible lifestyle.

Definitely don't lend her the money, tell her your circumstances have changed.

You are seriously considering going into debt to pay off someone elses loans? Someone with a poor history of managing money?

Don't ever lend money that you can't afford to write off.

I won’t lend it.
I do see that everyone has made good and valid points.
Thank you

It was insane anyway to consider going into overdraft - with all the extra expense and risk that that involves - to pay off the debt of someone else. Even more insane when they already have a history of serious debt problems.

OP
Mimi is right .
There is an unhealthy codependence here.

You are willing to put yourself in a position where you have no savings and an overdraft costing 40% to service each month?
How will she pay you back?
If she can afford to pay you X amount per month plus the 40% overdraft fee then she can save that money herself. IVA dont give her this type of money only a small allowance so where will it come from?
I cant emphasise enough.

This is NOT your responsibility and you are actually encouraging/ codependent in her poor money management if you do this
Friends do not ask for favours like this, CF do.

But if the official story is that you bought something off her you cannot then ask for a charge on her house!
It's either officially a loan or not. I would also imagine that her creditors would have to agree to only getting £7k back. What if they don't?
Either way you would be a fool to do this.

i lend her the balance under the guise of buying something big from her

Even more insane. You will have no proof of loan, and the creditors will want to know how come, if she had something so valuable that she could sell, she hasn't done this long ago.

This is crazy. They need to sell the house if it is a money pit. This won’t get any better and you’ll never your cash back as they’ll always be something which is more important than paying you back. She’ll then guilt you into accepting this.