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.

Well it doesn't matter if his wife doesn't know, does it? She will keep on spending what you will consider your money and you will feel resentful. Tell DH that if you are to lend money BOTH of them have to know and you need it in writing (witnessed).

And has the friend explained how he's going to cut £2k a month out without his wife noticing?

I'd bet on this not being repayment of one loan to another friend, but a consolidation of debts which are incurring interest. If your loan is interest free it shortens his repayment period considerably.

If your husband really wants to help this friend, lending him £25k and enabling him to keep the knowledge from his wife is absolutely not the way to do it. A bit of tough love - ‘no, I won’t lend you the money, but I will help you as far as I can to address your financial issues’ would be the far kinder approach in the long run.

All a loan will do is enable him to dig himself deeper, and probably lose your DH the thick end of the £25k and the friend in the process.

I feel sorry for her. Imagine how embarrassed and humiliated she will be if she finds out her 'financial advisor' husband has ponced 25k off 2 friends. That his credit rating is so bad he couldn't raise the money himself, he is risking his professional career. She will think everyone is laughing behind her back. I expect at least one other person knows friend 1 has had to call the debt in and if they know your husband is bailing him out, that sort of gossip always gets out.
My husbands best friend was a lovely chap but a show off who built up debts, he was binge drinking and self harming. I staged 2 interventions to get him help within his professional body, his problems were worse than I imagined. In the end he threw himself off a cruise ship. We never really know what is going on with people, so I think you need to be honest with his wife as part of the loan agreement, better safe than sorry. If anything did happen she will never forgive you.

Dh only told me on the condition I didn’t talk

Leaving the whole cluster-fuck waiting to happen loan situation to one side just for a moment... you have a DH problem.

He seriously considered not telling you that he was lending someone a very substantial amount of money, and his eventual sharing of this information (information to which you are entitled) is conditional on you keeping your mouth shut?? It's 2025, your DH does not get to forbid you from talking to your friend if you deem that to be the right course of action. Nor should he be placing "conditions" on sharing information with you about your family finances. You are supposed to be a team.

Btw the fact that your DH's friends financial situation has gotten so bad he has considered suicide is am argument for telling his wife, not against.

So he’s been on three holidays this year alone… it’s only April.
What on earth does his wife think is going on in her own home?
If she really is absolutely wet behind the ears and thinks Graham is doing Very Well, how is he going to explain cutting back?
I still think she’s needs to be told. If he were taking drugs, or had an OW, I have no doubts you would tell her.
He is being financially unfaithful.
As long as there is someone bailing him out, he will keep going. Once he’s used the 25k, you can bet your bottom dollar he will be borrowing from someone else soon.
He is not your husband’s friend. If he was, he’d ask for his advice and support in sorting his life out. He’d tell his wife.

This

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

and how will be do this without his wife noticing. If you do decide to lend the money (which is not a good idea) it must be done with the agreement he tells his wife. Otherwise no deal. He needs the money to pay his there friend so has no way to pay you back without some major changes.

I know, I feel the same, but legally, how can you dictate how they spend it. That's why we didn't' do this.

Good idea.
Dh can pay the debt back directly
And you tell the wife whatever she needs to know
If he suicidal his wife needs to know

How is he going to do that if his wife is unaware?

In fact why hasn't he already done that given he'd already been lent the £25k??

Can't believe there's two people daft enough to lend him this amount of money!

How long has he owed it, and did he pay any back to that person?

Yes of course he should tell his wife we all know that. He is probably ashamed. Dh would tell me if he had financial problems as he knows how I feel and that there’d be hell to pay if he didn’t.

How is he going to make lifestyle changes if his wife doesn’t know and isn’t on board? How is he going to explain that they can’t go on 4 holidays in the next 6 months if she doesn’t know they are in financial trouble and that they can’t NEVER live like that again?

Can’t EVER

I'd be more worried about being in a relationship with someone dumb enough to believe this scrounger.

A debt of this size may well have implications for his job/business if he is in finance - ie having to declare personal debts annually etc (which may well explain why he needs to hide it and doesn't want to make the loan 'official' ie from a bank etc.) Or, it may be a pay out to a client who complained about bad advice and he doesn't want to /can't go through his professional indemnity insurance as he's already at his limit/risks being struck off.

But he's clearly not going to tell her, and now that he has made you and your DH complicit in his deception and your money is enabling that deception to continue, don't you feel any moral obligation to tell her yourself? I couldn't look her in the eye knowing that someday soon she could find her whole world crashing down around her ears and whilst I couldn't prevent it I could potentially have softened the blow. Better to hear it from a friend than the shock of debt collectors turning up at your door or god knows what else.

Yes OP, he acknowledges this, but his DW is blissfully ignorant of all of this so what will she make of having "to make cuts in lifestyle" when she doesn't know why?
It's clear from your posts OP that you're nobody's fool and I think you've done all you can to protect your own situation given your lovely DH's (rather naive) attitude, but I totally agree with you that if there is any sign, any sign whatsoever, that DH's friend and his DW are not cutting their cloth accordingly, I absolutely would give her the knowledge she's been denied by her DH for goodness knows how long and I'd tell your DH this so he can advise his friend to "prepare" himself! 😂
I'm very glad your DH has had a written loan agreement drawn up and I trust you will get sight of this with both their signatures on it. Given that you are a co-owner in the business (even if "in name" only) may I also suggest that you email your accountant for written confirmation of the verbal advice he gave you both re. the tax situation?

Nope.. your Dh would be kissing bye bye to 25 grand

I wouldn’t do this, then it could be said the loan never happened or he wasn’t in receipt of the money. Could be hard to prove if ever needed.

It's your dh's money, so as long as it doesn't affect your family's financial security then it's his choice.
However, these situations frequently go badly at some point and resentment and lost friendships result.
My advice: tell your DH to be prepared to never get the money back, get excuses for being unable to pay an instalment or an instalment being short and endless excuses and having to go the legal route if he wants the money repayed.
If your dh was smart, and because the money is coming from his business, I'd get a legal doc drawn up and have it secured with some sort of collateral and I'd enforce the agreement if "friend" reneged. I'd also get tax /accounting advice.

Remember, this friend needs another friend to bail him out on a loan he can't repay to yet another friend.
What does that tell you?

On second thought, gift it or say, No. I know what I'd do....

Are you not worried about how the wife will react towards you if she does find out about the loan?

I’ve just spoken to dh. He’s having a proper loan agreement drawn up and there will be a monthly standing order. It is a 12 month loan

Frankly why bother? You can't get money from someone with none, and when it comes to it your DH certainly won't be a preferred creditor

Friend has told dh he knows he has been living beyond his means and will rein it in

Poppycock
Obviously he'll say anything to get the money, but he couldn't do this even if he wanted to without his DW noticing, and apparently DW mustn't be told ... though there's never been an explanation as to why

He sounds painfully like someone we know, whose wife is utterly oblivious and who is up to his eyeballs in debt with everyone imaginable, HMRC etc too so he’s a ticking timebomb.

He isn’t a friend, he’s a former business associate. I’m not convinced his wife actually would want to know, and it might be similar with this guy’s wife.

Some people like to bury their heads and spend the money without thinking about where it’s come from or whether there’s enough of it. I couldn’t, but that’s what she does….

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

Cue next post in a month's time: "AIBU to be furious my DH lent his friend 25k and they've just gone on their 4th holiday this year- to Bali but I cant say anything as his wife doesnt know".......