AIBU to object to my husband taking a large loan for a friend?

[Sefal]

My husband has had a friend for some 40 years, it is probably more accurate to describe his friend as being like a brother to him.

His friend has recently got into some financial difficulties due to a building project costing more than expected. His friend has no way of obtaining money to finish the building project, and without money to finish it, the whole project will need to be ‘written off’, essentially throwing tens if not hundreds of thousands of pounds away and facing bankruptcy. My husband then offered to get a loan out for a lot of money (tens of thousands), to give to his friend on the promise his friend pays it back (plus the interest) when the project is completed. His friend has leant him money in the past, but it has always been from his savings never anything like this. It’s also been small amounts - a couple of grand here and there.

I think this is absolutely insane. Me and my husband both earn very well, but we do not have any savings and have loans and debts ourselves. We have also committed to some very high expenses ourselves for the next few years, and my husband in particular has been very anxious about money, which has in turn made me very anxious and I have been trying to find ways to increase our income. This loan would be hundreds of pounds a month, which as I pointed out, why are we worrying about money when my husband can afford an additional hundreds of pounds on a loan?

I also pointed out things such as:

what if your friend can’t pay you back
what if the project costs more
what if you need it paid off and your friend wants more time
what if your friend falls ill
what if you lose your job
what if you fall out with your friend

Essentially pointing out all the reasons why this is nuts. I also told him that if he chooses to do this, I won’t be supporting him nor will I be taking any notice of his fretting about money or wanting to live frugally. I’ve told him if it affects our lives e.g him saying we can’t afford something, I’ll be reminding him of his ridiculous loan. We’ve had a massive argument because of it.

AIBU?

Absolutely no way. You have loans and debts yourself and high expenses upcoming, keep on saying all the things about friend not being able to pay back etc. Just no way.

I would not be able to forgive my DH if he agreed to do something like this. One thing it you are a multi millionaire but not in this situation in a million years.

You mentioned they lend to each other- if anything outstanding that gets paid now, plus maybe 5-10k if you have it, with a legal agreement.
Anything more than that, nope

He’s wanting to loan tens of thousands, not a couple of grand. I explained to him that I would only ever loan what I would be prepared to never get back, but he’s insistent his friend will pay him back and feels like he should because his friend has helped him in the past… never to this extent financially nor with personal loans!!

You dont know that it will make a profit though do you ? This is a really bad idea. If husband goes ahead he needs to get a legal charge on his friends house and make friend repay legal fees.

Unless happy to write off the amount then no

i took a loan out for my then dh. As you do when married and in love

now divorced and he hasn’t paid it in 2yrs - guess who is paying it - as in my name

If the project is ever finished, and money from it will go to the official loans the friend took out, and the lowest last priority will be his mate, your DH. Probably never get a penny back. This is an insane idea.

Everyone has said no, show him this, all the answers you have received.

it would be utter madness, it might be ok, he might manage to finish the work, he might manage to sell with enough profit to pay you back. He also might never finish, run over, need more (very likely) .

it will almost certainly ruin the friendship, and if it was me, it would beend of my marriage I wouldn’t be hanging around to see the outcome, and I certainly would make sure I wasn’t dragged down with them.

How come you don’t have any savings when you are on high salaries? How is DH going to afford the repayments?

If you and your husband already have debts yourselves, as you say, and no savings, then your financial position is pretty insecure already, even if your income is high. If you lose that income (anything can happen), you’re stuffed. You would have nothing to fall back on, but you’d still have the obligation to pay off this loan for the friend. So for that reason, I think this would be madness.

Nooo, that would be so reckless of your husband.

I’ve done this @Sefal and the person basically paid me the loan amount monthly just before the bank took the payments each month. I didn’t want to do it but felt I should - never again though. Spent every month worrying they’d not pay.

If he insists on going ahead, make sure it’s a fixed rate, unsecured loan, that only he is on the loan contract and not you, get him to get something in writing that states the friend will pay x amount for y months on z date each month, so he can take him to court if he doesn’t pay. And only do it if he has the loan payment spare every month.

They do say if a bank won't trust someone, no one else should either coz theres a big red flag blowing right in front of your DH and he's choosing to ignore it.
If you've got a mortgage together and he struggles to pay this loan then it affects you too coz you're basically connected to him financially.

Maybe he needs to see a solicitor and get a proper contract drawn up so that if he tries to not pay it then your DH can take him to court . Keep ALL msgs and especially ones saying it's a LOAN and friend is going to pay him back.. You need written proof at the very least. Not just word of mouth..
But it would be better if your DH said no of course.

Your husbands decision is ludicrous, absolutely insane. The fact your DH has to loan it means he doesn’t have it to lend. I absolutely guarantee he is never getting that money back, they never do in these situations.

As for getting a formal agreement drawn up - it’s not worth the paper it’s written on if he just simply can’t pay your DH back. Your DH can go to court by all means, and get a lovely piece of paper with a number on it, that he’s totally incapable of enforcing because there’s nothing to enforce it against.

But it sounds like the "friend" is on the verge of bankruptcy so that agreement wont mean anything if he does end up insolvent. All his debts would be at worst written off and at best, paid 10p in the pound. It would be complete madness to do this.

Bye bye money, bye bye friendship, bye bye marriage. Sorry to be simplistically bleak, but that's probably what's going to happen.

You are married so of course.

Really hoping you meant shouldn't.

Whether you mess around with separate bank accounts, in the final analysis if you're married, you're one unit. His debts are your debts. You should absolutely have the right to veto him on this.

No she wouldnt. Why do people still believe this?!

Eh? No she wouldn’t.

Again, no.

In a divorce if she can prove that the loan wasnt for the family (and it sounds like she can, an accountant will be able to show where the money went) it will be his debt to pay and not "theirs". Creditors cannot legally pursue her for the debt as long as it is in his name only, which it will be as the OP refuses to support it.

I feel really sorry that you’ve been placed in this situation. It’s so obviously an absolute recipe for disaster. If your husband goes ahead with this, totally disregarding your feelings, I would be seriously considering divorce.

I hope he sees sense - as you are both high earners with no savings but high expenditure, it’s maybe time for a long think. Did he get you into this predicament? Would you be better off alone, living with peace of mind and within your means?

The offer of taking out this loan is bad enough. I'd be more inclined to be furious he is prioritising this mans needs over my feelings about it. I wouldn't stand for it & your DH is being ridiculous.