Friend asked dh for 2 year loan

[ParsnipPuree]

Dh’s closest friend broke down to dh and told him he’s in trouble. Owes £25k to a friend who now needs it back. Dh offered to help on the basis it’s payed back in instalments every month for up to 2 years.

I am friends with his wife who is oblivious. Her dh won’t confide in her. She doesn’t know there’s a problem so will carry on as normal. I don’t think she’s a big spender but that’s not the point. They had a week away shortly before her dh and mine had this conversation.

Im angry because if there was a medical situation they couldn’t cover, that would be one thing but they’re obviously living beyond their means. Dh is taking the money out his company so it doesn’t affect me. If my friend knew she’d be mortified.

OP says the company not him personally will make the loan
I am not an Accountant but I have been in Business for a long time and I have no idea how its possible for a Business to just loan some random bloke money
My Business can't even loan ME money that easily

I think the question I'd be asking is how, if they're not managing their money now, they're going to be able to pay this loan back.

Well at least if things ever go wrong for your husband there will be a few people willing to pay to help him out.

It is a huge amount to anyone, of course it is.

Especially as the wife is non the wiser...

But then let's assume the friend is telling the truth, he presumably been paying his other friend back without the wife realising...

But that grain of salt is a boulder...

Don't do it. It will eat you up. I've been in serious debt before and the first thing I did when I got a reprieve, was to treat myself. Every time you see them spending on something that isn't essential, it will drive you crazy. And yet, if you are going to lend money, you can't really put limits on what it is spent on. We have had a very close relative ask for money recently and the decision absolutely chewed us up. I think they wanted a lump sum, we thought that would end up being good money after bad. Eventually after much deliberation, we decided on giving a fixed amount per mouth paid directly towards the debt. We don't expect to see that money again. But after the fixed period, there will be no more. I'm glad we didn't give a lump some, it would have driven me crazy and ruined what relationship was left.

So, why are you okay with giving this man £25,000?

The "friend" has all sorts of excuses. Plus the threat of suicide.

If he is genuinely suicidal, why is your husband not actively getting him to professional help? I don't think your husband really believes it or he wouldn't just let that sit.

What a giant load of fucking bullshit.

If I were you, @ParsnipPuree, I would be looking for a job and check out what would happen in the event of you two splitting up with a lawyer. You husband acts unilaterally with very large sums of money on little information and he doesn't prioritize you.

What do you think would happen if DH offered to pay the other friend back directly? Do you think Debt Friend would agree to that?

I would bet that the friend owes money to numerous people and just can’t make the repayments . Keeping this from his wife is just avoiding the inevitable . They need to face their debts now and stop borrowing although depending on his role he may no longer be able to practice if he becomes insolvent
The best way your DH can help us to persuade him to go and seek sone debt advice
If your DH insists on lending the money then he needs to get a formal loan agreement drawn up , otherwise if the friend goes bankrupt (& it sounds like he may do -there’s rarely ever only one creditor and it sounds like he’s exhausted all other lending streams) your DH will be last on the list and may never get any money back

That's not your fucking problem to solve is it?!

I'd be making the loan conditional on the wife signing the loan agreement too. Yes it's humiliating but she is also jointly liable for their debts as a couple so her husband is treating her like a mug. There's no guarantee she'll actually rein in spending if needed to give it back to you though.

As for the tax thing. You can take a loan from your own company but need to pay tax on it if not repaid by the end of the financial year. Giving a business loan out to a 3rd party with no interest charges is conceivable but would typically have penalties after the 24 months. You have bigger issues by then though.
Ultimately it would be a loss on the balance sheet which could be written off I suspect. But I'm not actually an accountant. If the company went into administration the loan could be called in.

As the saying hies
A fool and their money are soon parted
you will lose the money and the friend

So let me get this straight: you are getting divorced.

Cos if you tell the wife your husband will divorce you.

But if the friend doesn't repay the money, you'll divorce your DH (and be £12.5k down in the settlement).

Cut to the chase and just file now.

That’s because it’s your business and when the financial year ends, interest would become payable on any DLA balance (I am an accountant).

However, I can assure you that businesses can and do easily make loans to their directors. They just have to add interest at the base rate if it remains unpaid (again this is a simplified overview).

Goes

This whole situation is absolutely crackers.

He's in the lending industry but bouncing loans around from one friend to another like it's borrowing a tenner for a pack of cigarettes. If he's goof for monthly repayments on 25k over 12 months he should be able to find a proper source of a loan from a lending institution and not involve his friends in his mess.

I think one condition of your DH doing this thing that I think he definitely shouldn't be doing anyway, is that he tells his wife. It's absolutely out of order for him to hold his hand out for £25k and tell you and ask you to keep a secret like that. And asking your DH to keep it from you - the man's sense of morals and ethics is right there, staring you in the face. He's lying to his wife about money and he's happy to lie to his mate's wife (you) too. There's no way his story about his friend suddenly needing £25k back in a hurry is the full story, or even grounded in truth.

To put it really bluntly, £25k to a finance bro isn't enough to kill himself over, either. Either he's a very silly boy in some shit with somebody unsavoury, or he hasn't told your DH/ your DH hasn't told you exactly how much financial shit he is in, or he's absolutely not feeling suicidal, not over £25k I'm sorry he's just fucking not.

I can only tell you what I would do, which is to tell my DH that over my dead body does he lend this friend this money in these fucking bonkers circumstances that Just Does Not Add Up.

Ask to discuss it with the guy and his wife
She needs to know
Unless it is the husband running away fund because she is abusive

If he's cutting back by £2,000 per month I can't see how she won't notice anyway - unless he then borrows from someone else to cover up the money he's (hopefully) paying back to OP's DH.

Dh says friend acknowledges he will have to make cuts in lifestyle.

Yes I know that. By easily I supppose I meant with no potential tax liability
Op is talking about her H's Business lending the friend money and as far as I am aware he is not a director.
However as I said I am not an Accountant and you are so maybe it is possible for a Business to lend £25k to the MD's mate easily.

I would be saying the wife needs to sign the agreement or there is no agreement. You can’t “reign in the lifestyle” in a marriage without both sides of the couple being on board. What’s the stop her booking more holidays none the wiser and him then defaulting on you?

And since he can’t find the money now to pay his mate, why can he magically now reign it back to find it to pay you back?

I imagine if DH asked to pay “the friend” directly there wouldn’t be a friend at all would there?

But none of those terrible things have happened to this friend. He hasn't lost his job, his children are fine and his house hasn't been damaged. There are no circumstances that would pull on people's heart-strings. He is just living beyond his means with four luxury holidays a year and he wants his wife to stay in her SAHM bubble as none of her friends work.

If I gave someone a large loan, you can bet I would not feel constrained at all from dictating how it were spent. Don't like my terms, borrow elsewhere.

He'll acknowledge anything if it means he'll get the money. You're both being incredibly naive.

I can foresee an update on a year where you've been truly rinsed. Don't say we didn't warn you..