What would you do in this situation? Very stressed over this

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spicy618
spicy618 Posts: 2,114 Member
in Chit-Chat
Suppose you had a friendship of 10+ years. This person has been with you through most of the ups and downs of your adult life.

Has supported you through rough times (moral support not financial).
Was there when you 'closed' on your home first home.
As a mortgage broker, advised that you refinance that same home and lower interest rate. (good advice)
Has offered there home when you thought you needed to find another place to stay.
Has had your child stay with them for about 1 month when you needed them.
Has listened when you have troubles and needed advice.
Has treated you almost like a family member (included you in family reunions, photos, graduations, weddings, funerals, etc.)
Kids have been friends since the age of 6 (both are now over 18).
Has asked that their family Mentor your teenager, when you had no one else.

Now this friend is in a situation, which they need help saving an investment property left to them by a parent (worked hard all her life) who died and it's in jeopardy of being taken from them (taxes). When the housing market crashed they suffered greatly and so has the credit score. However, they've held on to most of the properties.

You have never borrowed any money from this friend, but they have from you in the past and have paid it back (give or take $200). Now, they are asking if you will take out a personal loan and lend them the money to save this 'Income generating' property. You yourself are in a tight financial situation, but have managed to keep Good Credit. They promise to pay it with the tax money that is on it's way, but won't be here within the required time to save the property.


What would you do?
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Replies

  • jrrflr
    jrrflr Posts: 109
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    That's a tough one. I was given advice of "do not lend money to a friend unless you can live with the possibility of not being repaid". If you are not in a position where you could make it a gift instead of a loan, simply explain your circumstance and hope the friendship is enough to overcome any hard feelings.

    I hope it works out for you.
  • grinch031
    grinch031 Posts: 1,679
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    Depends how much money it is. I would NEVER take out a loan to help a friend, but I would loan a small amount of cash to them that I can afford to pull out of my bank account. For me right now, it would probably be no more than $1000, but only if I know that person is responsible with finances. Otherwise I would say no.
  • Smuterella
    Smuterella Posts: 1,623 Member
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    Can you tell a white lie and say you got refused credit?
  • burg1801
    burg1801 Posts: 124
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    Don't do it; The People's Court was built on scenarios like this.
  • Reedern
    Reedern Posts: 525 Member
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    That is a very hard situation. You sound like someone that would really like to help, but you are afraid that it could hurt you in the long run. If it's not something you can do with ease, then maybe you should explain to them that you are not in a good enough place with your own finances to help them at this time. Option 2: make them sign a contract and get it notarized so that if they do not pay you back as promised that you have grounds for action.
  • mommared53
    mommared53 Posts: 9,543 Member
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    I know that's a tough one and I'm certainly glad I'm not in that position but I would have to caution against it. Maybe you could suggest she contact Suze Orman. I've seen her shows before and she may have some good advice that could help your friend.
  • futuresize8
    futuresize8 Posts: 476 Member
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    There are so many loans and programs out there to help people with bruised credit get what they need... If the friend goes through conventional methods, it may even help her rebuild hers. I would be reluctant to do this, but also afraid of what might happen if I didn't offer. Still, if the friend was using our history as leverage for a loan, I'd be a little hurt...
  • treetop57
    treetop57 Posts: 1,578 Member
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    If you say "no," you may lose a friend. If you say "yes," you will probably lose the friend and the money. She has put you in a terrible situation, but I'd say no. Never loan a friend money that you can't afford to lose. She may not believe it, but I'd try telling her, "I value our friendship too much to risk it by lending you this money."
  • grinch031
    grinch031 Posts: 1,679
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    So I still want to know how much money we're talking about here, and how much risk this poses to the OP's own finances?
  • Sl1ghtly
    Sl1ghtly Posts: 855 Member
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    Loans can destroy relationships. I give to friends.
  • yesthistime
    yesthistime Posts: 2,051 Member
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    I wouldn't do it.
  • andrucifer
    andrucifer Posts: 25
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    As your friend, she would have to understand the financial burden this puts you in. If you are not in a place where you can "help" her for an extended period of time (say, if her tax money falls through and she has to pay you back in another fashion) DO NOT go through with this. Money woes seriously strain even the best friendships. It would be something different if you had extra money around you were comfortable parting with for awhile, but most folks these days are struggling week by week to get their bills paid. Just my opinion... explain your financial situation and tell her no.
  • lookpretty
    lookpretty Posts: 276 Member
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    Nothing like money kills friendship, I agree with above white lie, make her think you tried to get the money but couldnt
  • Pir8Rav
    Pir8Rav Posts: 36 Member
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    Hmmm...heres some logic....as a rule - only put in as much as the other guy/gal.... that way to have as much vested interest as he/she does

    if they allow to put a lein on the property - sure... (if its 'underwater'...well that sucks and you should stay clear)
    if its an income generating property - be clear on specific benchmarks to recoup your loan first and foremost....sure
    if they allow you to take a % of equity for your 'investment' as a silent partner...sure
  • SavCal71
    SavCal71 Posts: 350 Member
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    Not without a legal, court-defendable agreement that provides the investment property as collateral.
  • ninerbuff
    ninerbuff Posts: 48,671 Member
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    Suppose you had a friendship of 10+ years. This person has been with you through most of the ups and downs of your adult life.

    Has supported you through rough times (moral support not financial).
    Was there when you 'closed' on your home first home.
    As a mortgage broker, advised that you refinance that same home and lower interest rate. (good advice)
    Has offered there home when you thought you needed to find another place to stay.
    Has had your child stay with them for about 1 month when you needed them.
    Has listened when you have troubles and needed advice.
    Has treated you almost like a family member (included you in family reunions, photos, graduations, weddings, funerals, etc.)
    Kids have been friends since the age of 6 (both are now over 18).
    Has asked that their family Mentor your teenager, when you had no one else.

    Now this friend is in a situation, which they need help saving an investment property left to them by a parent (worked hard all her life) who died and it's in jeopardy of being taken from them (taxes). When the housing market crashed they suffered greatly and so has the credit score. However, they've held on to most of the properties.

    You have never borrowed any money from this friend, but they have from you in the past and have paid it back (give or take $200). Now, they are asking if you will take out a personal loan and lend them the money to save this 'Income generating' property. You yourself are in a tight financial situation, but have managed to keep Good Credit. They promise to pay it with the tax money that is on it's way, but won't be here within the required time to save the property.


    What would you do?
    NEVER sign a loan for anyone. Having the money to lend and taking out money to lend are 2 different things. What if for some reason the person you're loaning to can't get the money for the monthly? Then you're screwed. If someone has to borrow money because of a misunderstanding on how to control it on their own, that burden will be put on you if you lend them the money. Sounds harsh, but the reality is many friendships get broken up over financial situations.
    Be empathetic. If it was that dire then they should take out a pay day loan if the money is truly coming in.


    A.C.E. Certified Personal Trainer
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    Been in fitness for 28+ years and have studied kinesiology and nutrition
  • marydb0000
    marydb0000 Posts: 43
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    I learned the hard way to NEVER to loan money that I couldn't afford to pay back myself. I also learned the hard way to NEVER co-sign a loan for anyone. How you turn down her request is up to you, but if she is truly your friend she will understand.
  • cmriverside
    cmriverside Posts: 34,081 Member
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    I would not lend it. This will be a problem between you that won't go away any time soon, whether you do or don't lend it.

    I have been put in this situation before, twice. I did not lend the money. In one case the friendship survived just fine, in the other I lost the friend.


    Look after yourself first.


    .
  • OnMyWeigh464
    OnMyWeigh464 Posts: 447 Member
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    A loan in YOUR name will affect YOUR credit rating if something happens and they default on payments. Personally, if this was me, I would decline. Even consigning a loan will affect your own credit if there's a default. So you have to be damn sure this friend is gonna have a perfect financial life over the term of the loan and so many things can happen to prevent your friend from making a payment on time.
  • JanieJack
    JanieJack Posts: 3,831 Member
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    Now, they are asking if you will take out a personal loan and lend them the money to save this 'Income generating' property. You yourself are in a tight financial situation, but have managed to keep Good Credit.

    I might give them a gift, if I had the savings, but I wouldn't take out a loan and give the money to a friend. I would, however, take out a loan and buy an interest in the property, if indeed that property is a good investment.

    "But this is a FRIEND" I can hear some folk saying... yup...even for a friend who bent over backwards to help me out all these years: my ex entered into all kinds of helpful loans for our "friends," including property, and guess who's going to spend the next 8 years paying them off with nothing to show for it. That would be me. Those friends? Bad mouth me for not doing more to help them.

    I no longer mix friendship and business.

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