Loaning money to a friend
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18-06-2017, 12:35 PM
RE: Loaning money to a friend
(16-06-2017 05:15 PM)Heath_Tierney Wrote:  A dear friend of mine is in a pretty serious financial bind. Alas, the problem he's having is entirely of his own making.

He's asked me if I could help him out "a little." A "little" is mid-4 figures.

This isn't the first time he's been in financial dire straits. He's actually had to claim bankruptcy twice: once as a result of a bad investment (not really his fault the market tanked) and once he just got in over his head giving his wife all the shiny baubles and things (including horses) she wanted.

I don't ever expect he'll be able to pay me back and if I have to kiss that money goodbye then so be it, I won't go hungry.

So, two questions to the thoughtful denizens of TTA:
  1. Would it be appropriate for me to put him in touch with a financial planner or someone who knows about budgeting to help him get back on track as a condition to giving him the money?
  2. Do you think I have the right - maybe even responsibility - to tell him how he should spend what I give him (if I do give him anything)?

*edited for spelling*

I look at it this way, if you cannot afford to give it away, then don't loan it either, because if he doesn't pay you back that could ruin your friendship.

I had a friend in the past who would ask me for money and tell me he'd pay it back and did not. It wasn't that he asked for it, but that he didn't keep his word. If he had said "I need some money but cant pay you back" I still would have considered it.

I would say whatever you do get it in writing if you chose to do it. That way if he doesn't keep his end, you can take him to court.

It may just be easier if you can afford to lose it, give it to him under the condition he sees a financial planner. If he refuses that would tell you he had no intent on paying you back anyway.

But seriously, put it in writing, make a payment plan. If he really needs it he wont object to that.

Ultimately it is your choice. You have to way the risk of not getting it back and the risk of losing a friend.

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19-06-2017, 03:08 AM
RE: Loaning money to a friend
I was told as a kid, only loan money to those that will pay it back....but even if that means you have to extract it from them at some point. (that's what happens when your dad is a drug dealer lol).

Anyway, I think you'd be 100% in the right to say "here is the money, but you have to agree with me right now, [potentially even in writing], this this is how you'll use it, and this is when you pay it back..." . If he can't agree to that, then don't bother.

I'm not amazing with saving my money/spending wisely, but I'd only ever lend out that much on the absolute promise that I'd be getting it back.

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20-06-2017, 06:55 AM
RE: Loaning money to a friend
In my opinion, and limited experience, there is no faster way to strain a friendship than by introducing money into the mix. You will either lose your friend or your money, more often both. Once money changes hands your relationship becomes strictly business, like the relationship between a bank and a borrower.

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20-06-2017, 07:00 AM
RE: Loaning money to a friend
Update: Seems the whole issue is moot. Just found out about this a few moments ago: he's going to get a loan from his father instead.

Thanks, everyone, for your input!
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